N-CSR 1 stiequitycombined.txt STI EQUITY AR_053104 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------- FORM N-CSR -------- CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES INVESTMENT COMPANY ACT FILE NUMBER 811-06557 STI CLASSIC FUNDS (Exact name of registrant as specified in charter) -------- 2 Oliver Street Boston, MA 02109 (Address of principal executive offices) (Zip code) Trusco Capital Management, Inc. 50 Hurt Plaza; Suite 1400 Atlanta, Georgia 30303 (Name and address of agent for service) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-800-428-6970 DATE OF FISCAL YEAR END: MAY 31, 2004 DATE OF REPORTING PERIOD: MAY 31, 2004 ITEM 1. REPORTS TO STOCKHOLDERS. [GRAPHIC OMITTED] ANNUAL ........................................... FINANCIAL REPORT ........................................... STI CLASSIC EQUITY FUNDS ........................................... A Family of Mutual Funds ........................................... May 31, 2004 [STI Classic LOGO OMITTED] BACKED BY TRADITION. STRENGTHENED BY EXPERIENCE.(SM) Dear Valued STI Classic Funds Shareholder: For investors, the year ending May 31, 2004 was decidedly brighter and a welcome change from the post-bubble weakness that began in early 2000. The economy grew at an above-average pace, helped significantly by lower interest rates and tax rebates. This in turn lifted corporate profits and equity prices, both domestic and international. However, bond yields bottomed during the year in response to the risks associated with a strengthening economy. I will expand on these developments in the following paragraphs and share Trusco Capital's outlook. Generally, after a period of vulnerability, the character of the economic expansion and the markets appear poised to shift to a more "traditional," sustained, cyclical nature, which historically has been favorable for the equity markets. Economic growth during the past year was very strong, statistically speaking. Available data showed inflation-adjusted growth of nearly 5% on a year-over-year basis, matching the best periods of the record expansion of the 1990s. However, much of the growth could be traced directly to the massive and simultaneous stimulus from federal tax cuts and rebates and low mortgage and bond yields. While this stimulus was an essential element to increased spending, the expansion was not yet self-sustaining, and so was viewed as vulnerable to setbacks. Sales growth improved as did corporate profits, but the rebound in earnings was due in large part to corporate self-help measures that were manifested in improved productivity. A resumption of job growth was seen as the litmus test to sustainability. This potential vulnerability, combined with low core inflation, kept Federal Reserve interest rate policy accommodative during the year, with the key Fed Funds rate holding at 1%; the lowest level since 1958. The S&P 500 Index rose 18.33% on a total return basis in the year ended May 31, 2004, with the bulk of the rise concentrated in the third and fourth quarters of last year. Mid-cap and small-cap stocks were even stronger, with the S&P Mid Cap 400 Index posting a 26.73% gain and the Russell 2000 Index rising 30.29%. On the international front, the MSCI EAFE Index gained 32.66%. Cyclically sensitive sectors led the market as did those closely linked to commodities. The Materials, Energy, Industrials, and Information Technology sectors each rose more than 20% during the twelve months ended May 31, 2004, while Consumer Discretionary and Finance stocks also posted above market returns. The above average gains in the commodity price sensitive sectors helped the Value style generally outperform the Growth style for the period. A final theme that dominated market performance during the year was a sharp rebound in stocks with no earnings and/or weak financial quality. This frustrated investors investing in higher quality companies with strong balance sheets and visible earnings growth. In the fixed-income markets bond yields moved higher over the course of the twelve months, though intra-year volatility was significant. The yield on the 10-year Treasury note fell to as low as 3.11% in June 2003 and rose as high as 4.86% just before the close of the fiscal year in May. However, the steady Federal Reserve policy kept short-term rates constant causing the yield differential between long and short maturity bonds to rise to near record levels. The Lehman U.S. Aggregate Bond Index fell a modest 0.44% during the year ending May 31, 2004, though longer-term bonds such as the 10-year Treasury note were considerably weaker falling over 5%. The stronger economy helped credit-sensitive sectors such as High Yield perform well, while Treasury securities generally underperformed. As we look ahead the economic expansion looks both solid and sustainable, and is capable of supporting further gains in corporate profits and in equity prices. A key reason for this was the resumption of job growth in 2004, following an uncomfortably long drought which kept interest rate policy stimulative. However the pace of growth is likely to slow as the stimulative benefits of tax rebates and mortgage financing subside. Inflation pressures will increase from their historically low level, putting pressure on the Federal Reserve to begin raising interest rates following a protracted period of stimulus. Bond yields are likely to rise further as the Federal Reserve starts to apply monetary restraint, but the pace of rate hikes is expected to be gradual as long as inflation pressures do not escalate sharply. We remain cyclically overweight in stocks within our asset allocation mix, but recognize volatility could increase once the Fed begins raising interest rates. Adherence to investment disciplines and greater price sensitivity on stocks will be much more important in the years ahead, as I have mentioned before, particularly if there is a meaningful rise in interest rates. The cornerstone of our investment philosophy is diversification and execution of the disciplined investment process by experienced investment professionals. I encourage you to read through the remainder of the report, as it contains comments from our fund managers on specific investment sectors and styles. Trusco has excellent fund managers and I am sure you will find their insights valuable. In closing, I want to take this opportunity to thank you for investing in the STI Classic Funds. We value the relationship we have with you and look forward to expanding it in the coming year through continued investment excellence and a broader array of investment alternatives. Sincerely, /s/Douglas S. Phillips Douglas S. Phillips, CFA Chief Investment Officer 1 STI CLASSIC AGGRESSIVE GROWTH STOCK FUND ---------------------------------------- The STI Classic Aggressive Growth Stock Fund ("the Fund") was added to the STI Classic lineup February 23, 2004. The Fund invests primarily in common stocks of U.S. companies of all sizes that exhibit strong growth characteristics. Using a "bottom-up" investment approach, we identify companies with favorable prospects for future revenue, earnings, and/or cash flow growth. Growth "drivers" are identified for each company and become critical to the ongoing evaluation process. Industry growth dynamics, competitive positioning, pricing flexibility, and diversified product offerings in conjunction with stock price appreciation potential help establish the foundation for the weighting of each security within the Fund and the resulting exposure to specific industries and economic sectors. Since the initiation of the Fund, macro economic and geopolitical issues have dominated the investing environment. After a brief rally late in February, the Fund experienced successive negative returns in March and April, rebounding during the last weeks of May. From inception through May 31, 2004, the Fund's T Shares returned 0% compared to -0.83% for the Russell 3000(R) Growth Index. Stock selection in Consumer Discretionary and Technology sectors led the Fund's relative outperformance. Consumer-driven and internet-related fund holdings were top aggregate contributors. Firming ad spending (increasingly via online vehicles), a rebounding economy and unflagging spending patterns were primary drivers to strength in the Consumer Discretionary sector. Supported by exceptional earnings reports, Fund Technology holdings produced broad-based gains (since Fund inception) significantly ahead of benchmark issues. However, weakness in Health Care and Telecommunications issues kept the Fund's performance in check. Health care declined late in the period lacking event catalysts, and the Fund's only telecommunications holding posted a negative return due to uncertainty pending a FCC ruling on spectrum expansion for its wireless data strategy. Better-than-expected growth across many sectors has yet to translate into comparable stock price performance. Looking forward, we are encouraged as corporate America exhibits signs of improving health with strong operating margins, large cash balances and a renewed propensity to hire. Our task remains the same: focus on fundamental research to uncover unique growth companies exhibiting rewarding investment potential for the Fund. /s/Nancy Zevenbergen Nancy Zevenbergen, CFA Co-Portfolio Manager /s/Brooke de Boutray Brooke de Boutray, CFA Co-Portfolio Manager /s/Leslie Tubbs Leslie Tubbs, CFA Co-Portfolio Manager 2 T SHARES(1) AVERAGE ANNUAL TOTAL RETURNS (PERIOD ENDED MAY 31, 2004) -------------- Cumulative Inception to Date -------------- 0.00% -------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Aggressive Growth Stock Fund, Russell 3000 T Shares Growth Index 2/29/04 10,000 10,000 5/04 9,950 9,870 A SHARES(1) AVERAGE ANNUAL TOTAL RETURNS (PERIOD ENDED MAY 31, 2004) -------------- Cumulative Inception to Date -------------- -0.10% Without Load -------------- -3.85% With Load -------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Aggressive Growth Stock Fund, Russell 3000 A Shares Growth Index 2/29/04 9,625 10,000 5/04 9,567 9,870 L SHARES(1) AVERAGE ANNUAL TOTAL RETURNS (PERIOD ENDED MAY 31, 2004) -------------- Cumulative Inception to Date -------------- -0.30% Without CDSC -------------- -2.29 With CDSC -------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Aggressive Growth Stock Fund, Russell 3000 L Shares Growth Index 2/29/04 10,000 10,000 5/04 9,722 9,870 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. (1) Commenced operations on February 23, 2004. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 3 STI CLASSIC BALANCED FUND ------------------------- The STI Classic Balanced Fund ("the Fund") seeks to provide both current income and growth in capital by investing in a blend of investment grade bonds and high quality large/midcap common stocks. Typically the Fund's asset allocation to bonds is 40% to 50% of the total portfolio, while common stocks are the balance, or 50% to 60% of assets. In this manner, the goal is to provide shareholders with an attractive and somewhat less volatile total investment return over longer time periods. Total return is defined as the current income from interest or dividends as well as changes in the value of assets held in the portfolio. Bond returns and stock returns continued to move in opposite directions over the past 12 months. For bond investors, grown comfortable with both a 20-year long bull market as well as a 31/2 year shorter bull market 2000-2003, the realization that bonds can have negative returns must be somewhat sobering. For the 12 months ending May 31, 2004, the Lehman U.S. Government/Credit Index had a total return of -1.51%. Stocks, on the other hand, rewarded shareholders nicely, with a total return of +18.33% on the S&P 500 Index of large cap stocks. What caused bonds to lag and stocks to soar? A number of different factors came together resulting in this de-linkage. First, stocks performed very poorly beginning in March 2000, a 3-year bear market of unusual length. During this period, bond returns were superb, as falling interest rates and a flight to more stable investments pushed bond prices up. Stock returns reached extreme low levels compared to bonds last year--thus setting the stage for a significant "snapback", much like a tightly coiled spring. Second, bond yields probably got too low last summer, relative to underlying fundamentals, just as stock prices got way too high in 2000. Many of the elements conducive to falling interest rates/rising bond prices began to reverse last year. Specifically, economic growth began to accelerate, commodity prices rose, the U.S. dollar began to weaken, and bond investors began to anticipate tighter monetary policy from the Federal Reserve Bank. At the same time, rising business and consumer confidence and accelerating earnings growth were welcome tonics for stock prices. In short, stocks and bonds do not necessarily move together, but sometimes diverge based on major trends in the global economy. Most of the damage in interest rates was done in intermediate and longer maturity bonds. For example, the 5-year Treasury bond yield went from 2.28% to 3.80% over the 12-months ending May 31, 2003, 10-years rose from 3.35% to 4.65%, and long dated 30-year bonds from 4.36% to 5.35%. Reflecting a continued policy of "watchful waiting" by the Fed, 3-month T-bills were about unchanged at 1.1% over this period. Thus, virtually all bond indices had tiny positive to slightly negative returns; the only exception was non-investment grade "high-yield" bonds, where the Lehman U.S. Corporate High Yield Bond Index returned +11.90%. The Fund had a very disappointing result last year. The Fund's T Shares returned +4.24%, which trailed its blended benchmark's return of +10.13%. This blended benchmark consists of 60% S&P 500 Index for stocks and 40% Lehman U.S. Government/Credit Index for bonds. Needless to say we do not like reporting these results, particularly since they come on the heels of several years in which the Fund did exceptionally well. Most of the shortfall was due to positioning in equities; the Fund focuses on primarily high quality large companies with strong earnings growth. Last year, weak companies with no earnings and smaller, leveraged capitalizations dramatically outperformed. Over the longer term, we believe the Fund's bias to companies with strong financial positions will produce more consistent positive returns for Fund shareholders. /s/Robert J. Rhodes Robert J. Rhodes, CFA Portfolio Manager 4 T SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) -------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 4.24% 0.22% 1.77% 8.21% 7.68% 116.11% -------------------------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Lehman Balanced Fund, 60/40 S&P 500 U.S. Government/ T Shares Hybrid: Index Credit Index 5/31/94 10,000 10,000 10,000 10,000 5/95 10,872 11,675 12,019 11,161 5/96 12,749 13,798 15,437 11,619 5/97 14,872 16,636 19,979 12,536 5/98 18,167 20,449 26,110 13,976 5/99 20,161 23,438 31,601 14,543 5/00 21,173 25,142 34,913 14,818 5/01 21,859 24,800 31,230 16,725 5/02 21,140 23,478 26,904 18,036 5/03 21,111 23,744 24,736 20,662 5/04 22,006 26,149 29,270 20,350 A SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004)
-------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 3.91% -0.11% 1.43% 7.85% 7.31% 108.37% Without Load -------------------------------------------------------------------------------- -0.02% -1.39% 0.65% 7.44% 6.91% 100.55% With Load --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Lehman Balanced Fund, 60/40 S&P 500 U.S. Government/ A Shares Hybrid: Index Credit Index 5/31/94 9,625 10,000 10,000 10,000 5/95 10,423 11,675 12,019 11,161 5/96 12,182 13,798 15,437 11,619 5/97 14,164 16,636 19,979 12,536 5/98 17,241 20,449 26,110 13,976 5/99 19,086 23,438 31,601 14,543 5/00 19,975 25,142 34,913 14,818 5/01 20,556 24,800 31,230 16,725 5/02 19,822 23,478 26,904 18,036 5/03 19,715 23,744 24,736 20,662 5/04 20,486 26,149 29,270 20,350 L SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) ------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ------------------------------------------------------------------- 3.12% -0.83% 0.68% 6.93% 82.28% Without CDSC ------------------------------------------------------------------- -1.12% With CDSC ---------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Lehman Balanced Fund, 60/40 S&P 500 U.S. Government/ L Shares Hybrid: Index Credit Index 6/30/95 10,000 10,000 10,000 10,000 5/96 11,401 11,617 12,552 10,327 5/97 13,157 14,007 16,245 11,143 5/98 15,900 17,217 21,230 12,422 5/99 17,465 19,735 25,695 12,927 5/00 18,142 21,169 28,387 13,171 5/01 18,525 20,881 25,393 14,866 5/02 17,723 19,768 21,876 16,032 5/03 17,519 19,992 20,112 18,366 5/04 18,066 22,017 23,799 18,089 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 5 STI CLASSIC CAPITAL APPRECIATION FUND ------------------------------------- The STI Classic Capital Appreciation Fund ("the Fund") employs a philosophy of investing in large and midcap companies with positive earnings trends and reasonable valuations. Earnings trend criteria include a stable or improving rate of earnings growth, positive growth relative to investor expectations, and fundamental signs of growth sustainability. Other important elements considered are above average or rising profitability, revenue growth, and superior earnings quality. Generally companies in which the Fund invests represent leaders within their industry segments, as demonstrated by revenue growth, market shares, and levels of profitability. In terms of portfolio risk control, the Fund is structured to provide diversification across major industry sectors. Sector weightings will vary over the economic cycle based on the rise and fall in relative earnings growth of different industries and companies. Regardless of the trend of overall corporate profits, the Fund strives to achieve a level of earnings growth well above its benchmark, the S&P 500 Index. The Fund manager also employs an active sell discipline to eliminate stocks with deteriorating earnings profiles, while striving to keep annual portfolio turnover reasonable. For the 12-month period ending May 31, 2004, the broad equity market represented by the S&P 500 Index generally advanced. This rally began in early March 2003 with removal of uncertainty about the Iraq Conflict. Fueled by improving investor confidence, rising corporate profits, and a continued accommodative monetary policy by the Federal Reserve, the S&P 500 Index advanced approximately 29% from the end of April 2003 to a high reached this January. Since reaching that high, the market has stalled out and remained in a very narrow price range. While company earnings reports were exceptionally good in the first quarter of 2004, investors have become more cautious on several fronts. First, geopolitical concerns on terrorism. Second, a degree of uncertainty related to this year's Presidential elections. Third, and most importantly, interest rates have risen from the lows of last summer and there is growing conviction that Fed policy will soon move away from extreme leniency. Also, inflation has picked up a bit and energy prices have remained well above "consensus" expectations, draining away a certain amount of consumer purchasing power. For the entire 12-month period ending May 31, 2004, the total return including reinvestment of dividends was +18.33% for the S&P 500 Index. This of course represents a still satisfactory gain particularly in view of the negative returns during the prior three years. The Fund's T Shares achieved a total return of +11.89% over the 12-months ending May 31, 2004. In the context of our expectations, this result was very disappointing. The Fund's investment process did not change, nor did our emphasis on above-average growth and companies of strong financial capacity. So what happened? In hindsight, the Fund would have done better by turning its stock selection process upside down. By that we mean, the types of stocks which had the highest returns were those of the lower financial quality, smaller capitalizations, negative or low earnings, biggest decliners in the prior three years, highest price volatility, and those which do not pay dividends. The Fund focuses on larger, higher quality, proven growth or visibly intact cyclical growth stocks, a philosophy which produced solid results in the prior three years, but was out of favor last year. That said, stock selection could have been better than it was. Our stock picking was ineffective in four important sectors, Finance, Technology, Consumer Discretionary, and Energy. These sectors were over 60% of Fund assets. Stock selection was excellent in Health Care and Industrials, and we correctly had no exposure to the poorly performing Telecomm and Utilities segments, but these smaller victories were not enough to offset the shortfall in the big sectors. The results in Technology and Finance are simple to analyze. Our sector picks during the 2000-2002 bear market were stable growth, high quality revenue companies which substantially excelled during the downturn. These stocks tended to lag when the market took off and interest shifted to more volatile, leveraged business models. Other excellent companies lagged in other sectors. In Consumer Discretionary, BED BATH & BEYOND is a retailing category leader. The company has a high return on investment, has consistently exceeded Wall Street earnings forecasts, has grown EPS at an average rate of 30% over the last year, has a superb balance sheet with zero debt and substantial free cash flow generation--yet the stock lagged the S&P 500 Index by 29 percentage points over the past year. Similarly, in Health Care, JOHNSON & JOHNSON reported 15-20% growth every quarter, well above its long-term trend line of 10-11%, consistently beat estimates and had good earnings quality, yet underperformed by 14 percentage points. Yes, we are very cognizant of the distinction between "Good Company" and "Good Stock" but these kinds of disconnects seem extreme to us and bound to be remedied in the months to come. Some significant shifts in Fund sector allocations have occurred over the last year. The Consumer Discretionary weight has been cut while Consumer Staples has been boosted. Our bottoms-up work suggested better opportunity in Staples, and on an overview basis, we believe consumer spending tailwinds (tax cuts, mortgage cash-outs, etc.) will fade going forward. In the Staples sector we have purchased AVON PRODUCTS, GILLETTE, KIMBERLY-CLARK, and WALGREEN--all top quality strong brand franchises with solid growth. 6 Fund weights in Energy and Health Care have been reduced substantially, again on the basis of our bottoms-up analysis. In Health Care, we see fewer companies with strong relative earnings trends, even though as a growth manager it is a sector we like a lot long-term. Energy stocks are facing tougher comparisons and we have elected to look for better entry points now that the price of oil has eased somewhat. Positions in Technology and Industrial stocks have been raised substantially. At the company level, we see lots of good ideas in these two areas. At a more macro level, we believe there will be a somewhat typical handoff from "early-cycle" consumer stocks to more "late cycle" capital spending related companies. Specifically, capital spending follows profits, and many companies not only have strong earnings but also extremely cash-rich balance sheets which will fund capital purchases. As we look into the year ahead, the economy remains on a solid upward trajectory. Short-term interest rates will trend higher, as is typical of the middle stage of an expansion. Earnings growth will moderate, but remain sufficient to emphasize equity commitments. And earnings quality as well as balance sheets are the best they have been in a long while--managements are being prudent. We believe the Fund is well positioned in the types of growing, leadership companies which have typically rewarded shareholders well. We thank you for your participation in the STI Classic Capital Appreciation Fund and will as always do our utmost to produce excellent results in the coming year. /s/Robert J. Rhodes Robert J. Rhodes, CFA Portfolio Manager 7 T SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) -------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 11.89% -3.60% -1.23% 9.41% 9.57% 197.17% -------------------------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Capital Appreciation Fund, S&P 500 T Shares Index 5/31/94 10,000 10,000 5/95 10,663 12,019 5/96 13,752 15,437 5/97 17,143 19,979 5/98 22,202 26,110 5/99 26,161 31,601 5/00 28,510 34,913 5/01 27,444 31,230 5/02 24,409 26,904 5/03 21,975 24,736 5/04 24,588 29,270 A SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004)
-------------------------------------------------------------------------------- Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 11.19% -4.24% -1.89% 8.71% 9.15% 185.33% Without Load -------------------------------------------------------------------------------- 7.07% -5.46% -2.63% 8.29% 8.80% 174.62% With Load --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Capital Appreciation Fund, S&P 500 A Shares Index 5/31/94 9,625 10,000 5/95 10,196 12,019 5/96 13,069 15,437 5/97 16,172 19,979 5/98 20,815 26,110 5/99 24,395 31,601 5/00 26,418 34,913 5/01 25,261 31,230 5/02 22,310 26,904 5/03 19,945 24,736 5/04 22,177 29,270 L SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) ------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ------------------------------------------------------------------- 10.54% -4.70% -2.34% 8.50% 108.29% Without CDSC ------------------------------------------------------------------- 8.54% With CDSC ---------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Capital Appreciation Fund, S&P 500 L Shares Index 6/30/95 10,000 10,000 5/96 12,387 12,552 5/97 15,266 16,245 5/98 19,559 21,230 5/99 22,786 25,695 5/00 24,557 28,387 5/01 23,380 25,393 5/02 20,563 21,876 5/03 18,309 20,112 5/04 20,239 23,799 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 8 This page left intentionally blank. STI CLASSIC EMERGING GROWTH STOCK FUND -------------------------------------- Added to the STI Classic Funds lineup on February 23, 2004, the STI Classic Emerging Growth Stock Fund (the "Fund") invests primarily in stocks of U.S. companies exhibiting strong growth characteristics with market capitalizations generally below $10 billion. In selecting investments for the Fund, we place heightened emphasis on companies with market capitalizations of $5 billion or less. Using a "bottom-up" investment approach, we identify companies with favorable prospects for future revenue, earnings, and/or cash flow growth. Growth "drivers" are identified for each company and become critical to the ongoing evaluation process. Industry growth dynamics, competitive positioning, pricing flexibility, and diversified product offerings in conjunction with stock price appreciation potential help establish the foundation for the weighting of each security within the Fund and the resulting exposure to specific industries and economic sectors. Macro economic and geopolitical issues have greatly influenced the investing environment since the initiation of the Fund. Brief advances at Fund onset were undone by successive negative returns in March and April, but a late May rally pared further Fund losses. Since inception, the Fund's T Shares returned -4.00% compared to 0.92% for the Russell Midcap(R) Growth Index. The Fund's higher exposure to smaller capitalization issues (compared to the benchmark) in combination with stock selection in Technology and Health Care sectors drove the majority of Fund underperformance. The Technology sector loss was predominantly due to three separate stocks: a fabless semiconductor manufacturer that experienced front-end foundry supply difficulty, a second semiconductor company (packaging/test services) missed revenue and earnings expectations due to operating margin erosion, and lastly a computer technology/device storage company saw increased price competition and lost market share to a larger competitor. A stock specific issue also weighed on Fund Health Care performance. A medical device/power source manufacturer trimmed short-term revenue forecasts due to a temporary halt of shipments to a major customer. Fund strength was found in Consumer Staples (strong comparable store growth and unit expansion for premier food retailer) and Telecommunication (solid usage trends for rural wireless service provider) holdings. Looking forward, we are encouraged as corporate America exhibits signs of improving health with strong operating margins, large cash balances and a renewed propensity to hire. Despite this short period of underperformance, we remain optimistic the Fund will benefit from the higher revenue and earnings dynamics of smaller capitalization companies. Our task remains the same: focus on fundamental research to uncover unique growth companies exhibiting rewarding investment potential for the Fund. /s/Nancy Zevenbergen Nancy Zevenbergen, CFA Co-Portfolio Manager /s/Brooke de Boutray Brooke de Boutray, CFA Co-Portfolio Manager /s/Leslie Tubbs Leslie Tubbs, CFA Co-Portfolio Manager 10 T SHARES(1) AVERAGE ANNUAL TOTAL RETURNS (PERIOD ENDED MAY 31, 2004) -------------- Cumulative Inception to Date -------------- -4.00% -------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Emerging Russell Growth Stock Fund, Midcap T Shares Growth Index 2/29/04 10,000 10,000 5/04 9,467 9,928 A SHARES(1) AVERAGE ANNUAL TOTAL RETURNS (PERIOD ENDED MAY 31, 2004) -------------- Cumulative Inception to Date -------------- -4.10% Without Load -------------- -7.70% With Load -------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Emerging Russell Growth Stock Fund, Midcap A Shares Growth Index 2/29/04 9,625 10,000 5/04 9,103 9,928 L SHARES(2) AVERAGE ANNUAL TOTAL RETURNS (PERIOD ENDED MAY 31, 2004) -------------- Cumulative Inception to Date -------------- -4.20% Without CDSC -------------- -6.12% With CDSC -------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Emerging Russell Growth Stock Fund, Midcap L Shares Growth Index 2/29/04 10,000 10,000 5/04 9,258 9,928 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. (1) T Shares and A Shares were offered beginning on February 23, 2004. (2) L Shares were offered beginning on February 27, 2004. L Shares' performance for the periods prior to February 27, 2004 reflects the performance of the Fund's T Shares. The performance of the T Shares has not been adjusted to reflect the higher internal operating expenses of the L Shares. If it had, performance would have been lower than that shown. The cumulative total return of the L Shares from its inception date of February 27, 2004 to May 31, 2004 was -5.52%. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 11 STI CLASSIC GROWTH AND INCOME FUND ---------------------------------- The STI Classic Growth and Income Fund (the "Fund") invests primarily in a diversified mix of midsized and larger domestic common stocks and listed ADRs of foreign companies with market capitalizations greater than $1.5 billion. The Fund is managed in a large capitalization, value-oriented style, competing against funds with a similar objective categorized under Lipper's "Large Cap Value Equity" peer group. The Fund's management team utilizes a proprietary quantitative screening process to identify attractive ideas. The team then evaluates each potential idea with careful fundamental research, incorporating the depth of its collective investment experience, and constructs a diversified portfolio that seeks competitive long-term appreciation with below-average variability of return. We have good news to report to our shareholders in this year's Fund update. Entering the fiscal year last June, the equity markets were two months into a rally that has proven to be both robust and sustained. For the 12 months ending May 31, 2004, the S&P 500 Index had a total return of 18.33%, while our primary benchmark, the S&P 500/BARRA Value Index, gained 20.53%. Both returns greatly exceeded investor expectations. After three poor years of performance, the equity markets were reinvigorated by a confluence of positive events. First, there was moderation in geopolitical fears as the U.S.-led campaign in Iraq transitioned from an outright military offensive to stabilization and rebuilding phase. Secondly, economic recovery domestically, began to gain some traction thanks to 40-year lows in interest rates, consumer tax stimulus, declining value of the dollar, and an explosion in corporate earnings and cash flows. Third, internationally, booming economies in China and other developing countries created demand for primary goods and commodities to such a degree that the inflation pot was stirred for the first time in years. Together, better demand and pricing lifted the beleaguered manufacturing sector out of its extended funk, as spending on capital projects, inventory and increased hiring all filtered through corporate America. It is important to highlight this backdrop to the year just ended, for it represents the fruition of the outlook we planted in last year's report and supports our rationale for how we positioned the Fund over that timeframe. The Fund has maintained both broad sector diversification across generally higher quality issues and above-benchmark exposure to economically sensitive sectors. Unlike in the 2003 fiscal year, the Fund benefited this year from this positioning strategy and from our patience and conviction in sticking with that strategy even while occasionally being out of step with the market. Returns were strong both in absolute and relative terms during 2004 with the T Shares, AShares and L Shares returning 21.76%, 21.45%, and 20.58% respectively. Due to tax-loss carry forwards created during the preceding market downswing, latest results flowed entirely to the Fund's shareholders without any capital gain distributions being included. Good performance and no capital gain taxes due is especially good news for our shareholders this year. Let me recap a few of the reasons the Fund outperformed during 2004. First, we continued to eschew attempts to time the market, instead staying fully invested throughout the period of turbulence and rapid rebound. Next, we maintained meaningful exposure to those sectors that offered superior earnings leverage to an improving economy, notably Industrials and Energy, where both the weighting in the Fund and the stock selection positively impacted results. Some of our other sector decisions that contributed to results included overweightings in Consumer Staples and Health Care and underweightings in Telecommunications and Utilities. Stock selection in Health Care and Consumer Discretionary was also very accretive to results. Overall, our approach to stock selection followed a simple formula that served us well: focus on specific companies that could benefit from modest economic improvement, significant self-help actions in place to leverage the recovery, and stock valuations that reflected current skepticism by the consensus investor. Even in a good year such as the fiscal year ended 2004, some of our decisions, both at the sector and individual stock level, didn't work out as planned. For example, we remained overweighted to benchmark in Technology and underweighted in Financials; both of those decisions detracted from results. Fortunately, our sizable underweighting in Financials ended up having a small negative performance impact because of good relative performance of the stocks held in that area. Another thesis that went off track involved Telecommunications. During late 2003, we identified a valuation opportunity to increase exposure in Telecommunications, a strategy that worked out for about two months. However, that opportunity was quickly derailed by continued, abrupt shifts in the competitive and regulatory landscapes, and, as a result of a bidding war for AT&T Wireless, we chose to abandon that thesis and reduce our exposure to that area. While we do employ rigorous assessment of risk and return and utilize a time horizon for investment well beyond the compressed and myopic standard often set by the market, we will nevertheless miss the mark on occasion. In such instances, we strive to identify and weed out our mistakes and move on to fresher and stronger ideas. Looking into the year ahead, we do see evidence accumulating that will alter the character of the cyclical bull market we all have been enjoying. So far, economic upswing has most dramatically been made manifest in booming corporate profits which have greatly exceeded investor expectations. Surprisingly good earnings have been the primary market driver this time around, a far different dynamic than what investors encountered throughout most of the 1990's: a secular decline in interest rates and inflation fostering higher and higher valuation levels for equities, culminating in a market valuation 12 "bubble" period in 1999 and 2000. Price/earnings multiples on stocks tend to expand in periods of falling interest rates and conversely tend to contract during periods of rising interest rates and inflation. The economic recovery propelling resurgent corporate profitability also is putting increased upward pressure on interest rates and inflation, particularly evident since April. Although the prospect of rising rates penalizes equity valuations, it does not tend to stunt corporate profits growth until the economic cycle starts to mature. This "sweet spot" in the earnings cycle is what the Fund was positioned to take advantage of and the payoff has been seen in results over the past 6 months. Once profit growth starts to undershoot rather than exceed investor expectations, concurrent with rising rates and contracting valuations, this earnings driven bull market cycle will face significant obstacles and headwinds. We anticipate the market following this path over the year ahead and investors eventually refocusing on sustainable growth rather than cyclical growth. Following our methodology, we have recently been finding better relative values with lower risk profiles in some of the larger, less cyclically-oriented names. Consequently, we have started to harvest some of our cyclical exposures based on valuation and started to migrate to ideas where company- specific self-help actions and the potential for better sustainable future growth are being underappreciated by the market today. Transient distractions, problems and investor skepticism and unwillingness to look beyond shorter term seem to provide recurring misvaluations in the stock market and ongoing opportunities for new ideas across all sectors of the market. For this reason, we remain sanguine about the upcoming year and believe that the Fund is well positioned even as the investment climate starts to become much more challenging. On behalf of the Growth and Income team, thank you for your support and continued vote of confidence in our approach. /s/Jeff Markunas Jeff Markunas, CFA Portfolio Manager 13 T SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) -------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 21.76% 0.13% 0.91% 10.36% 10.18% 210.31% -------------------------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Growth S&P 500/BARRA and Income Fund, Value T Shares Index 5/31/94 10,000 10,000 5/95 11,520 11,707 5/96 14,325 14,792 5/97 17,510 18,558 5/98 22,165 23,925 5/99 25,619 27,056 5/00 26,672 27,754 5/01 26,701 29,733 5/02 24,618 25,151 5/03 22,014 22,966 5/04 26,804 27,681 A SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004)
-------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 21.45% -0.08% 0.71% 10.25% 9.59% 175.52% Without Load -------------------------------------------------------------------------------- 16.89% -1.34% 0.05% 9.83% 9.21% 165.19% With Load --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Growth S&P 500/BARRA and Income Fund, Value A Shares Index 5/31/94 9,625 10,000 5/95 11,090 11,707 5/96 13,785 14,792 5/97 16,852 18,558 5/98 21,314 23,925 5/99 24,652 27,056 5/00 25,618 27,754 5/01 25,601 29,733 5/02 23,560 25,151 5/03 21,030 22,966 5/04 25,541 27,681 L SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) -------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date -------------------------------------------------------------------- 20.58% -0.83% -0.04% 9.28% 125.23% Without CDSC -------------------------------------------------------------------- 18.58% With CDSC ---------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Growth S&P 500/BARRA and Income Fund, Value L Shares Index 4/30/95 10,000 10,000 5/95 10,293 10,445 5/96 12,721 13,197 5/97 15,440 16,557 5/98 19,403 21,346 5/99 22,267 24,140 5/00 22,959 24,763 5/01 22,783 26,528 5/02 20,803 22,440 5/03 18,429 20,490 5/04 22,222 24,697 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 14 This page left intentionally blank. STI CLASSIC INFORMATION AND TECHNOLOGY FUND ------------------------------------------- The STIClassic Information and Technology Fund ("the Fund") seeks long-term capital appreciation by investing primarily in U.S. companies that are expected to benefit substantially from Information and Technology. The purpose of the Fund is to capture above-average growth that is driven by long-term, major shifts from a resource-based economy to an information-based economy. The Fund has a three-tiered investment structure that classifies holdings into one of the following three categories: pioneers, technology infrastructure companies and information beneficiaries. The first category, pioneers, includes firms whose primary line of business focuses on an emerging technology product or information-intensive service. The second category, infrastructure companies, consists of established firms that provide infrastructure to support the electronic construction and transfer of information. The third category of companies encompasses established firms that harness information as a key driver of growth in their businesses. This three-tiered investment strategy is designed to diversify Fund holdings and produce a superior risk-reward profile to those exhibited by pure technology funds. The Fund believes that a carefully constructed, well-diversified portfolio is an extremely effective tool for investing in technology companies and information-intensive businesses. This philosophy has proven to be very helpful for technology and aggressive growth investors during the volatile period of the last few years. The Fund uses bottom-up analysis in which the competitive advantages of companies are examined. Considerable consideration is given to a company's leadership position, return on invested capital record, and customer demand trends. In addition, the Fund considers each security in the context of industry, economic and financial market trends. Finally, each position is assessed for its ability to optimize the portfolio's balance between risk and potential reward. Between May 31, 2003 and May 31, 2004, Information Technology stocks generated impressive returns. The Goldman Sachs Technology Composite Index returned 24.16% during the twelve-month period and the Lipper Science & Technology Funds Objective rose 23.96%. To understand the source of these gains, one should recall the concerns that weighed on technology investors in the first half of 2003. First, geopolitical concerns not only had dampened investor enthusiasm for aggressive stocks but also had depressed corporate demand for technology products and services. Second, it was unclear whether the conclusion of major military combat in Iraq would spark an economic recovery. Many argued that the economy had structural problems that extended beyond near-term geopolitical disruptions. Third, a chorus of technology observers argued that even if the economy regained strength it would be unlikely that Information Technology companies would benefit extensively. These skeptics pointed to the fact that there was no new revolutionary technology application, such as the World Wide Web or Microsoft's Windows 95 on the horizon to stimulate broad-based information technology demand. They argued that there was little pent-up demand for personal computers, semiconductors and software that capacity was excessive in many technology industries; that Asian manufacturers threatened to soak up incremental demand and that software firms were caught in perpetual price wars that were funded by large cash reserves. Valuations also still appeared to be out of touch with reality. Juniper Networks, a poster child for technology-investing alarmists, was being purchased by some tech investors in 2003 at more than 92 times analysts' projected earnings for the year 2004. The positive news for Information Technology stocks was that much of these concerns had become accepted by market participants and conservative expectations had flowed through to sober earnings estimates among technology analysts. For example, even after the economy showed some signs of rebounding in the summer months of 2003, analysts still were forecasting that during the third quarter of 2003 technology companies would grow revenues a modest 5% over the amount produced in the third quarter of 2002--a period that was marked by constrained personal and corporate IT spending. Despite our concerns about the short and long-term prospects for technology companies, we were comforted by these conservative expectations among analysts and investors. Accordingly, the Fund was positioned more aggressively in the summer of 2003. The shift proved to be advantageous. As the economy began to show signs of robust growth, economically sensitive technology stocks like Cypress Semiconductor, National Semiconductor, SAP and Cisco Systems boosted the Fund's performance. Stunning returns by some very aggressive stocks such as Akamai Technologies, TTM Technologies, Ask Jeeves and Yahoo! offset lagging returns by some non-tech, information-oriented stocks such as King Pharmaceuticals, Merck and Pfizer. The net result was that the Fund's T Shares generated a 23.56% return during the twelve-month period, inline with gains exhibited by pure technology indices. In the last few months of the Fund's fiscal year, many conditions have appeared very encouraging for technology companies. Semiconductor companies have benefited from stronger-than-expected global demand and from low excess production capacity. Some semiconductor companies in fact have gone from operating at less than 80% capacity to now running at full capacity, allowing them to raise prices significantly. Although improvement for software companies has not been as rapid or broad-based, some encouraging demand trends have developed for the software industry as well. Business also has stabilized for many telecom infrastructure and networking companies and a few are experiencing remarkable earnings growth. 16 As they weigh these recent positive developments, investors also must grapple with the prospects for technology stocks once news flow becomes less exciting. How much will market enthusiasm wane and tech stock valuations contract as 50% year-over-year earnings growth rates moderate to something significantly lower? How long the current strong global economic growth will last and how much additional fuel will it provide to demand for technology goods and services? How much production capacity will technology companies around the world begin to add and what might this new supply do to industry pricing? These are difficult questions that challenge investors' ability to gain competitive insights. Whereas the rebound off depressed levels twelve months ago helped lift most technology stocks, higher expectations today suggest that stock selection probably will be a much more important driver of investment performance in the upcoming year. We thank you for your interest in the Information and Technology Fund. It is an understatement to say that change is a continuous challenge when investing in the universe of stocks we track. We hope that the Fund's diversified structure and active management has provided its shareholders an effective vehicle for gaining exposure to this high-growth area of the market. /s/Alan S. Kelley Alan S. Kelley Portfolio Manager 17 T SHARES(1) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) -------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years to Date to Date -------------------------------------------------------- 23.56% -17.47% -5.98% -25.00% -------------------------------------------------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Information Goldman Sachs Lipper Science and Technology Fund, Technology & Technology T Shares Composite Index Funds Objective 9/30/99 10,000 10,000 10,000 5/00 15,870 13,356 15,070 5/01 13,340 7,311 8,730 5/02 8,060 4,920 5,619 5/03 6,070 4,600 5,211 5/04 7,500 5,711 6,460 A SHARES(2) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) -------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years to Date to Date -------------------------------------------------------- 23.39% -17.50% -6.01% -25.10% Without Load -------------------------------------------------------- 18.70% -18.55% -6.77% -27.91% With Load -------------------------------------------------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Information Goldman Sachs Lipper Science and Technology Fund, Technology & Technology A Shares Composite Index Funds Objective 9/30/99 9,625 10,000 10,000 5/00 15,274 13,356 15,070 5/01 12,840 7,311 8,730 5/02 7,758 4,920 5,619 5/03 5,842 4,600 5,211 5/04 7,209 5,711 6,460 L SHARES(3) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) -------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years to Date to Date -------------------------------------------------------- 22.53% -18.27% -6.85% -28.20% Without CDSC -------------------------------------------------------- 20.53% With CDSC --------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic Information Goldman Sachs Lipper Science and Technology Fund, Technology & Technology L Shares Composite Index Funds Objective 9/30/99 10,000 10,000 10,000 5/00 15,818 13,356 15,070 5/01 13,157 7,311 8,730 5/02 7,864 4,920 5,619 5/03 5,863 4,600 5,211 5/04 7,184 5,711 6,460 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. (1) T Shares were offered beginning on September 30, 1999. (2) A Shares were offered beginning October 27, 2003. A Shares' performance prior to October 27, 2003 reflects the performance of the Fund's T Shares. The performance of the T Shares has not been adjusted to reflect the higher internal operating expenses of the A Shares. If it had, performance would have been lower than that shown. The cumulative total return of the A Shares from its inception date of October 27, 2003 to May 31, 2004 was 4.61%. (3) L Shares were offered beginning on January 24, 2000. L Shares' performance for the periods prior to January 24, 2000 reflects the performance of the Fund's T Shares. The performance of the T Shares has not been adjusted to reflect the higher internal operating expenses of the L Shares. If it had, performance would have been lower than that shown. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 18 This page left intentionally blank. STI CLASSIC INTERNATIONAL EQUITY FUND ------------------------------------- The STI Classic International Equity Fund (the "Fund") invests in equity securities of foreign issuers and seeks to provide long-term capital appreciation. We strive to obtain investment results that outperform the international markets as measured by the MSCI EAFE Index. The Fund focuses on sector and company fundamentals specifically looking for companies that are leaders in their industry, produce quality products, and have sound financial positions. Our goal is to find companies that have improving growth characteristics at attractive valuation levels relative to their global peers. The Fund posted a record annual return of 28.64% for the T Shares class, the highest return for the Fund in any fiscal year during the course of its 8-year history. The Fund's benchmark, the MSCIEAFE Index, returned 32.66% for the same trailing 12-month period. T Shares ranked in the 45th percentile of its Lipper peer group and returns were slightly above average for all funds with an international investment objective. This year was a dramatic change from the previous 3 years with absolute performance being very positive. Comparing the MSCI EAFE Small Cap indices and the regular MSCI EAFE, one observes the size bias in the market for the year with the Small Cap Index up 47.23% vs. 32.66% for the EAFE. The MSCI EAFE Value outperformed the MSCI EAFE Growth by 11.43%, returning 38.44% vs. 27.01% for the Growth Index. From a regional standpoint, Japan was a large contributor to absolute return with the MSCI Japan Index up 49% in U.S. dollar terms. The Fund slightly outperformed in Japan as a result of good stock selection in Industrials with holdings like Mitsui OSK Lines (a bulk shipping company), up 78%, and Marubeni (a trading conglomerate), up 131% for the period. The best performing global industry group of the period was Japanese Bank shares. Japanese banks returned an incredible market cap- weighted industry group return of 170% for the period; the Fund was able to select the best of this group and return over 200% on our Japanese bank holdings. The Fund held Sumitomo Mitsui Financial Group which was up 308% and UFJ Holdings, up 434%. The banks rebounded after many years of depression as the Japanese economy returned to healthy growth and companies began doing more business with the banks. However, to somewhat offset these tremendous gains, we missed out on the Software and Semiconductor rally which had many companies up over 100%. In the Fund, having no software exposure, our average tech hardware stock was up only 37%. Needless to say, we struggled with stock selection in Japanese Information Technology, but overall did well in a very fast moving, volatile market. The United Kingdom and Ireland were up around 28% and we did well picking stocks in Consumer Discretionary and Staples. William Hill, a UK based gaming operator, was up 150% as consumers opened their wallets and began to spend more on entertainment and gambling. Housing stocks also were strong and our holding, George Wimpey, was up 60%. Stock selection in the Energy and Health Care sectors was a small drag on performance. Furthermore, trading costs and turnover were higher than we would have liked due to the very high volatility over the past year. In Asia (excluding Japan), Esprit Holdings, a fashion company and long term holding, was up 110% helping performance. Also, Fraser & Neave, a Singapore based soft drink and beer company, was up 56% and also benefited the Fund. Europe is where we had the most difficulty over the last year. We did a good job selecting stocks in the Information Technology sector with holdings like L.M. Ericsson, a telephone technology company, which was up 173% for the period. We were hurt somewhat by the fraud at Parmalat; we had a small position and exited at the first sign of trouble, but it was still a 50% drop from where we had entered. Another good stock in Europe was Gamesa, a wind generation and turbine company, which was up 114%. For the most part, across the rest of the sectors in Europe we underperformed slightly as smaller cap stocks traded up on expectations of future earnings growth. This small cap rally was very substantial and the main reason for the Fund not outperforming its benchmark for the year. As I mentioned above, in Europe there was a severe small cap bias for the year. If one analyzed the European benchmark portfolio (MSCI Europe Index) by breaking it down into five equal groups or quintiles based on the market cap of individual stocks, you can see that the largest group returned only 27% for the year. The remaining groups, in order, returned 36%, 43%, 47%, 51%. So the smallest group of stocks outperformed the largest group of stocks by almost two times (51% vs. 27%). Our portfolio had a bias toward the larger capitalization range and did not get the advantage of this small cap rally. The remainder of the year is likely to see a shift in leadership as some dramatic outperformance in small cap stocks and lower quality stocks starts to unwind. We think in a choppy market, or a sideways, but oscillating market, our focus on bottoms-up stock selection will benefit performance of the Fund. 20 Where are the opportunities now? Asia is in the early stages of a regional growth cycle. At the beginning and at the margin, exports to Europe and the US are important, but increasingly the growth in Asia is self sustaining. There will be a decoupling to some degree of the Western and Asian markets. Asian economies are just starting to hit their stride as the U.S. stabilizes at a lower growth trajectory. Many stocks in Asia are up well over 50% in the last year, but still below 2000 levels. Investors can gain access to these growth opportunities without overpaying. We are overweight in Japan and Continental Europe and underweight in the UK and Australia. The chart below shows the estimated YOY%* EPS growth and forward P/E for the major regions. Portfolio P/E YOY%* Stance --- ----- ------ Japan 22x 16 + Continental Europe 16x 18 + Asia ex-Japan 16x 9 = UK 14x 14 - Australia 17x 16 - At the sector level, it grows increasingly complex because of the specifics of each sector region. In general, we will continue to be tilted at the sector level toward stocks that will benefit from the global economic expansion, but with a continued eye on valuation. Now, as the expansion begins to mature, investor mindset is shifting and valuation is becoming increasingly important. As this occurs, our process should begin to gain increasing traction versus the market in general. /s/Chad Deakins Chad Deakins, CFA Portfolio Manager *Year over year. 21 T SHARES(1) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) ----------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ----------------------------------------------------------------------- 28.64% 0.59% 0.08% 8.38% 111.97% ----------------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT* STI Classic International MSCI EAFE Equity Fund, Index, T Shares in U.S.$ 1/31/95 10,000 10,000 5/95 11,637 10,862 5/96 15,179 12,021 5/97 18,714 12,928 5/98 22,807 14,365 5/99 21,112 14,991 5/00 23,346 17,560 5/01 20,827 14,535 5/02 19,027 13,139 5/03 16,478 11,523 5/04 21,197 15,287 A SHARES(2) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004)
----------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ----------------------------------------------------------------------- 27.97% 0.20% -0.30% 8.00% 105.18% Without Load ----------------------------------------------------------------------- 23.15% -1.05% -1.06% 7.57% 97.55% With Load -----------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT* STI Classic International MSCI EAFE Equity Fund, Index, A Shares in U.S.$ 1/31/95 9,625 10,000 5/95 11,201 10,862 5/96 14,585 12,021 5/97 17,918 12,928 5/98 21,750 14,365 5/99 20,049 14,991 5/00 22,084 17,560 5/01 19,626 14,535 5/02 17,880 13,139 5/03 15,430 11,523 5/04 19,746 15,287 L SHARES(3) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) ------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ------------------------------------------------------------------- 27.32% -0.45% -0.97% 7.36% 94.08% Without CDSC ------------------------------------------------------------------- 25.32% With CDSC ---------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT* STI Classic International MSCI EAFE Equity Fund, Index, L Shares in U.S.$ 1/31/95 10,000 10,000 5/95 11,637 10,862 5/96 15,139 12,021 5/97 18,467 12,928 5/98 22,260 14,365 5/99 20,372 14,991 5/00 22,283 17,560 5/01 19,674 14,535 5/02 17,783 13,139 5/03 15,242 11,523 5/04 19,406 15,287 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. *For periods prior to December 1995, when the Fund began operating, the performance quoted reflects performance of the Adviser's similarly managed collective investment fund. The collective investment fund was not a registered mutual fund, and therefore, was not subject to certain investment and tax restrictions which may have adversely affected performance. (1) T Shares were offered beginning on December 1, 1995. (2) A Shares were offered beginning on January 2, 1996. A Shares' performance for the periods prior to January 2, 1996 reflects the performance of the Fund's T Shares. The performance of the T Shares has not been adjusted to reflect the higher internal operating expenses of the A Shares. If it had, performance would have been lower than that shown. (3) L Shares were offered beginning on January 2, 1996. L Shares' performance for the periods prior to January 2, 1996 reflects the performance of the Fund's T Shares. The performance of the T Shares has not been adjusted to reflect the higher internal operating expenses of the L Shares. If it had, performance would have been lower than that shown. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 22 This page left intentionally blank. STI CLASSIC INTERNATIONAL EQUITY INDEX FUND ------------------------------------------- The STI Classic International Equity Index Fund (the "Fund") invests in equity securities of foreign issuers and seeks to closely match the returns of the MSCI EAFE-GDP Index, the Fund's benchmark. To help minimize tracking error, the Fund holds approximately 700 stocks in the portfolio. Tracking error represents a measure of how closely a portfolio matches the return of its benchmark. The tracking error of the Fund continues to be low and thus the Fund is a very efficient vehicle to gain international equity market exposure. Performance for the year was positive for all sectors and all countries in the Developed Markets. Higher beta industries like Industrials, +45%; Information Technology, +45%; and Finance, +41% led the way. Lower beta industries like Consumer Staples, +25%; Health Care, +22%; and Utilities, +21% still did well. In transition the Telecommunication industry seems to be changing and beginning to act more like a utility; it was up only 16% even though historically it has had a higher beta than three-quarters of the other sectors. This year was a dramatic change from the previous 3 years with absolute performance being very positive. Comparing the MSCI EAFE Small Cap indices and the regular MSCI EAFE, one observes the size bias in the market for the year with the Small Cap Index up 47.23% vs. 32.66% for the EAFE. The MSCI EAFE Value outperformed the MSCI EAFE Growth by 11.43%, returning 38.44% vs. 27.01% for the Growth Index. From a regional standpoint, Japan was a large contributor to absolute return with the MSCI Japan Index up 49% in U.S. dollar terms. Japan had three of the best performing regional industry groups with Japanese banks up 171%; real estate companies up 110%, and insurance companies up 88%. Small Cap issues outperformed Large Cap issues in all regions. Higher beta stocks outperformed lower beta stocks as well. Smaller Cap stocks dramatically outperformed Larger Cap issues during the year. Stocks with high future earnings growth expectations performed better than those with lower growth expectations. It was a volatile and high magnitude global equity rally based on the positive economic growth cycle. The Fund's TShares returned 34.07% for the trailing 12-month period and did a good job of tracking its index, the MSCI EAFE-GDP Index which returned 33.74%. Why should you invest in International markets now? The U.S. market as a percent of the total global equity market has continued to shrink, and is now less than half of the investable global equity universe. An investor with no International exposure is missing out on half the opportunity set. A U.S. only investor is missing out on good performing markets. International stocks have a low correlation with other U.S. based asset categories, and therefore the overall volatility of a portfolio including international and domestic equities should theoretically offer enhanced diversification. The STI Classic International Equity Fund has attractive characteristics as a good vehicle to gain exposure to the developed International markets of the world. /s/Chad Deakins Chad Deakins, CFA Portfolio Manager 24 T SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) ----------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ----------------------------------------------------------------------- 34.07% 0.47% -0.37% 4.87% 60.70% ----------------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic International MSCI EAFE-GDP Index, Equity Index Fund, Weighted in T Shares U.S.$ (Price Return) 6/30/94 10,000 10,000 5/95 10,331 10,343 5/96 11,291 11,256 5/97 12,135 12,067 5/98 15,269 14,401 5/99 16,470 15,010 5/00 19,659 17,900 5/01 15,944 14,558 5/02 13,962 12,817 5/03 12,059 10,924 5/04 16,167 14,609 A SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004)
----------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ----------------------------------------------------------------------- 33.26% 0.02% -0.82% 4.40% 53.78% Without Load ----------------------------------------------------------------------- 28.31% -1.24% -1.58% 4.01% 48.01% With Load -----------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic International MSCI EAFE-GDP Index, Equity Index Fund, Weighted in A Shares U.S.$ (Price Return) 6/30/94 9,625 10,000 5/95 9,904 10,343 5/96 10,786 11,256 5/97 11,554 12,067 5/98 14,471 14,401 5/99 15,532 15,010 5/00 18,461 17,900 5/01 14,896 14,558 5/02 13,012 12,817 5/03 11,186 10,924 5/04 14,907 14,609 L SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) ------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ------------------------------------------------------------------- 32.60% -0.58% -1.45% 3.99% 42.10% Without CDSC ------------------------------------------------------------------- 30.60% With CDSC ---------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT STI Classic International MSCI EAFE-GDP Index, Equity Index Fund, Weighted in L Shares U.S.$ (Price Return) 6/30/95 10,000 10,000 5/96 10,911 11,020 5/97 11,610 11,814 5/98 14,455 14,099 5/99 15,421 14,696 5/00 18,202 17,525 5/01 14,591 14,253 5/02 12,655 12,548 5/03 10,812 10,695 5/04 14,337 14,303 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 25 STI CLASSIC LIFE VISION AGGRESSIVE GROWTH FUND ---------------------------------------------- The year ending May 31, 2004 was decidedly brighter for the markets and for investors in the STIClassic Life Vision Aggressive Growth Fund. The economy and corporate profits grew at an above-average pace, Federal Reserve interest rate policy remained low and accommodative, and equity prices moved higher. The Fund, a managed allocation of STI Classic stock funds, outperformed its blended benchmark for the one, three, and five years ended May 31, 2004. Economic growth during the past year was very strong, statistically speaking, though much of the strength was directly attributable to the well-timed interest rate and federal tax cuts that were instrumental in sustaining consumer spending. While this stimulus was an essential element to increased spending, the expansion was not yet self-sustaining, even into early 2004, and so was viewed as vulnerable to setbacks. A resumption of job growth was seen as the litmus test to sustainability. This potential vulnerability, combined with low core inflation, kept Federal Reserve interest rate policy accommodative during the year, with the key fed funds rate falling and holding at 1%. However, job growth finally accelerated in the second quarter of 2004, raising hopes of a more self-sustaining expansion, but also fears of higher interest rates. In equities, the S&P 500 Index rose 18.33% on a total return basis in the year ended May 31, 2004, with the bulk of the rise concentrated in the third and fourth quarters of last year. Mid Cap and Small Cap stocks were even stronger, with the S&P Mid Cap 400 Index posting a 26.73% gain and the Russell 2000 Index rising 30.29%. On the international front, the MSCI EAFE Index gained 32.66%. Above average gains in the commodity price sensitive sectors helped the Value style generally outperformed Growth for the period. The Fund benefited from its exposure to the Small Cap, Mid Cap, and International markets as well as to the fixed-income High Yield market. The Fund's T Shares returned 20.34% in the year ended May 31, 2004, compared with an 16.51% blended benchmark comprised of 90% S&P 500 Index, and 10% Citigroup 3-Month Treasury Bill Index. As we look ahead the economic expansion looks both solid and sustainable, and is capable of supporting further gains in corporate profits and in equity prices. A key reason for this was the resumption of job growth. However the pace of the expansion is likely to slow as the stimulative benefits of tax rebates and mortgage financing subside. Inflation pressures will increase from their historically low level, putting pressure on the Federal Reserve to begin raising interest rates following a protracted period of stimulus. Bond yields are likely to rise further as the Fed starts to apply monetary restraint, but the pace of rate hikes is expected to be gradual as long as inflation pressures do not escalate sharply. A gradual rise in yields should not be a longer-term disruption to the equity markets. We are maintaining a high weight in stocks within the Fund within our asset allocation mix, but we have reduced our weighting in SmallCap stocks in favor of Large Caps given the extreme outperformance by Small Caps over the past several years and shifts in some of our key valuation measures. We retained our overweight position in International equities, but are currently neutral in on Growth and Value styles. In closing, I want to take this opportunity to thank you for investing in the Life Vision Aggressive Growth Fund. We appreciate your confidence and we will work hard to continue our strong investment performance in the year ahead. Sincerely, /s/Alan M. Gayle Alan M. Gayle Senior Investment Strategist 26 T SHARES(1) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) -------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 20.34% 0.12% 2.10% 8.73% 8.37% 150.24% -------------------------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT* STI Classic Life Vision Citigroup Aggressive Growth Fund, 90/40 S&P 500 3-Month Treasury T Shares Hybrid: Index Bill Index 5/31/94 10,000 10,000 10,000 10,000 5/95 11,170 11,865 12,019 10,524 5/96 13,707 14,946 15,437 11,102 5/97 15,882 18,967 19,979 11,686 5/98 19,408 24,281 26,110 12,300 5/99 20,809 29,028 31,601 12,886 5/00 22,318 31,949 34,913 13,556 5/01 23,003 29,108 31,230 14,341 5/02 21,402 25,549 26,904 14,719 5/03 19,185 23,775 24,736 14,934 5/04 23,087 27,701 29,270 15,079 A SHARES(2) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004)
-------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 20.08% 0.05% 2.06% 8.70% 8.35% 149.72% Without Load -------------------------------------------------------------------------------- 15.62% -1.21% 1.28% 8.28% 7.98% 140.28% With Load --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT* STI Classic Life Vision Citigroup Aggressive Growth Fund, 90/40 S&P 500 3-Month Treasury A Shares Hybrid: Index Bill Index 5/31/94 9,625 10,000 10,000 10,000 5/95 11,170 11,865 12,019 10,524 5/96 13,707 14,946 15,437 11,102 5/97 15,882 18,967 19,979 11,686 5/98 19,408 24,281 26,110 12,300 5/99 20,809 29,028 31,601 12,886 5/00 22,318 31,949 34,913 13,556 5/01 23,003 29,108 31,230 14,341 5/02 21,402 25,549 26,904 14,719 5/03 19,185 23,775 24,736 14,934 5/04 23,037 27,701 29,270 15,079 B SHARES AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004)
-------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 19.49% -0.20% 1.91% 8.62% 8.28% 147.86% Without CDSC -------------------------------------------------------------------------------- 14.49% -1.54% 1.57% With CDSC ----------------------------------------
[Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT* STI Classic Life Vision Citigroup Aggressive Growth Fund, 90/40 S&P 500 3-Month Treasury B Shares Hybrid: Index Bill Index 5/31/94 10,000 10,000 10,000 10,000 5/95 11,170 11,865 12,019 10,524 5/96 13,707 14,946 15,437 11,102 5/97 15,882 18,967 19,979 11,686 5/98 19,408 24,281 26,110 12,300 5/99 20,809 29,028 31,601 12,886 5/00 22,318 31,949 34,913 13,556 5/01 23,003 29,108 31,230 14,341 5/02 21,402 25,549 26,904 14,719 5/03 19,137 23,775 24,736 14,934 5/04 22,867 27,701 29,270 15,079 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. *For periods prior to June 1997, when the Fund began operating, the performance quoted reflects past performance of Crestar Bank's similarly managed asset allocation model, adjusted to reflect the Fund's fees and expenses. The asset allocation model was not a registered mutual fund, and therefore was not subject to certain investment and tax restrictions which may have adversely affected performance. (1) T Shares were offered beginning on June 30, 1997. (2) A Shares were offered beginning on October 16, 2003. A Shares' performance for the periods prior to October 16, 2003 reflects the performance of the Fund's T Shares. The performance of the TShares has not been adjusted to reflect the higher internal operating expenses of the AShares. If it had, performance would have been lower than that shown. The cumulative total return of the A Shares from its inception date of October 16, 2003 to May 31, 2004 was 8.43%. (3) B Shares were offered beginning on March 11, 2003. B Shares' performance for the periods prior to March 11, 2003 reflects the performance of the Fund's T Shares. The performance of the T Shares has not been adjusted to reflect the higher internal operating expenses of the B Shares. If it had, performance would have been lower than that shown. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 27 STI CLASSIC LIFE VISION CONSERVATIVE FUND ----------------------------------------- The year ending May 31, 2004 was decidedly brighter for the markets and for investors in the STIClassic Life Vision Conservative Fund (the "Fund"). The economy and corporate profits grew at an above-average pace, Federal Reserve interest rate policy remained low and accommodative, and equity prices moved higher. The Fund, a managed allocation of STI Classic stock and bond funds, outperformed its blended benchmark in its first year ended May 31, 2004. Economic growth during the past year was very strong, statistically speaking, though much of the strength was directly attributable to the well-timed interest rate and federal tax cuts that were instrumental in sustaining consumer spending. While this stimulus was an essential element to increased spending, the expansion was not yet self-sustaining, even into early 2004, and so was viewed as vulnerable to setbacks. A resumption of job growth was seen as the litmus test to sustainability. This potential vulnerability, combined with low core inflation, kept Federal Reserve interest rate policy accommodative during the year, with the key fed funds rate falling and holding at 1%. However, job growth finally accelerated in the second quarter of 2004, raising hopes of a more self-sustaining expansion, but also fears of higher interest rates. In equities, the S&P 500 Index rose 18.33% on a total return basis in the year ended May 31, 2004, with the bulk of the rise concentrated in the third and fourth quarters of last year. Mid Cap and Small Cap stocks were even stronger, with the S&P Mid Cap 400 Index posting a 26.73% gain and the Russell 2000 Index rising 30.29%. On the international front, the MSCI EAFE Index gained 32.66%. Above average gains in the commodity price sensitive sectors helped the Value style generally outperformed Growth for the period. In the fixed-income markets bond yields moved higher over the course of the twelve months, though intra-year volatility was significant. The yield on the 10-year Treasury note fell to as low as 3.11% in June 2003 and rose as high as 4.86% just before the close of the fiscal year in May. The Lehman U.S. Aggregate Bond Index fell a modest 0.44% during the year ending May 31, 2004, though longer-term bonds such as the 10-year Treasury note were considerably weaker falling over 5%. The stronger economy helped credit-sensitive sectors such as High Yield perform well, while Treasury securities generally underperformed. The Fund benefited from its exposure to the Small Cap, Mid Cap, and International markets as well as to the fixed-income High Yield market. The T Shares returned 5.79% in the year ended May 31, 2004 (see Note 1 on page 29), compared with an 3.32% blended benchmark comprised of 20% S&P 500 Index, 70% Lehman U.S. Aggregate Bond Index, and 10% Citigroup 3-Month Treasury Bill Index. As we look ahead the economic expansion looks both solid and sustainable, and is capable of supporting further gains in corporate profits and in equity prices. A key reason for this was the resumption of job growth. However the pace of the expansion is likely to slow as the stimulative benefits of tax rebates and mortgage financing subside. Inflation pressures will increase from their historically low level, putting pressure on the Federal Reserve to begin raising interest rates following a protracted period of stimulus. Bond yields are likely to rise further as the Fed starts to apply monetary restraint, but the pace of rate hikes is expected to be gradual as long as inflation pressures do not escalate sharply. We remain cyclically overweight stocks in the Fund within our asset allocation mix, but we have reduced our weighting in Small Cap stocks given the extreme outperformance by the sector and over the past several years and shifts in some of our key valuation measures. We retained our overweight position in International equities, but are currently neutral in on Growth and Value styles. In the fixed-income segment, we will emphasize mortgage-back and selected corporate bonds as a way to enhance current yield without taking additional maturity risk. In closing, I want to take this opportunity to thank you for investing in the Life Vision Conservative Fund. We appreciate your confidence and we will work hard to continue our strong investment performance in the year ahead. Sincerely, /s/Alan M. Gayle Alan M. Gayle Senior Investment Strategist 28 T SHARES(1) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) ------------------------------------------- Annualized Cumulative nception Inception One Year to Date to Date ------------------------------------------- 5.79% 8.40% 10.34% ------------------------------------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
STI Classic Life Vision Lehman Citigroup Conservative Fund, 70/20/10 U.S. Aggregate S&P 500 3-Month Treasury T Shares Hybrid Benchmark: Bond Index Index Bill Index 3/31/03 10,000 10,000 10,000 10,000 10,000 5/03 10,482 10,466 10,271 11,394 10,020 5/04 11,089 10,813 10,225 13,483 10,117
A SHARES(2) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) ------------------------------------------- Annualized Cumulative Inception Inception One Year to Date to Date ------------------------------------------- 5.64% 8.27% 10.19% Without Load ------------------------------------------- 1.65% 4.93% 6.05% With Load ------------------------------------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
STI Classic Life Vision Lehman Citigroup Conservative Fund, 70/20/10 U.S. Aggregate S&P 500 3-Month Treasury A Shares Hybrid Benchmark: Bond Index Index Bill Index 3/31/03 9,625 10,000 10,000 10,000 10,000 5/03 10,089 10,466 10,271 11,394 10,020 5/04 10,658 10,813 10,225 13,483 10,117
B SHARES(3) AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDED MAY 31, 2004) ------------------------------------------- Annualized Cumulative Inception Inception One Year to Date to Date ------------------------------------------- 5.38% 8.05% 9.91% Without CDSC ------------------------------------------- 0.38% 4.82% 5.91% With CDSC ------------------------------------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
STI Classic Life Vision Lehman Citigroup Conservative Fund, 70/20/10 U.S. Aggregate S&P 500 3-Month Treasury B Shares Hybrid Benchmark: Bond Index Index Bill Index 3/31/03 10,000 10,000 10,000 10,000 10,000 5/03 10,482 10,466 10,271 11,394 10,020 5/04 10,646 10,813 10,225 13,483 10,117
Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. (1) T Shares were offered beginning on November 6, 2003. T Shares' performance for the periods prior to November 6, 2003 reflects the performance of the Fund's B Shares. The performance of the BShares has not been adjusted to reflect the lower internal operating expenses of the TShares. If it had, performance would have been higher than that shown. The cumulative total return of the TShares from its inception date of November 6, 2003 to May 31, 2004 was 2.68%. (2) A Shares were offered beginning on November 11, 2003. A Shares' performance for the periods prior to November 11, 2003 reflects the performance of the Fund's B Shares. The performance of the B Shares has not been adjusted to reflect the lower internal operating expenses of the AShares. If it had, performance would have been higher than that shown. The cumulative total return of the AShares from its inception date of November 11, 2003 to May 31, 2004 was 2.82%. (3) B Shares were offered beginning on March 11, 2003. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 29 STI CLASSIC LIFE VISION GROWTH AND INCOME FUND ---------------------------------------------- The year ending May 31, 2004 was decidedly brighter for the markets and for investors in the STIClassic Life Vision Growth and Income Fund (the "Fund"). The economy and corporate profits grew at an above-average pace, Federal Reserve interest rate policy remained low and accommodative, and equity prices moved higher. The Fund, a managed allocation of STI Classic stock and bond funds, continued to outperform its blended benchmark for the past one, three, five, and ten years ended May 31, 2004. Economic growth during the past year was very strong, statistically speaking, though much of the strength was directly attributable to the well-timed interest rate and federal tax cuts that were instrumental in sustaining consumer spending. While this stimulus was an essential element to increased spending, the expansion was not yet self-sustaining, even into early 2004, and so was viewed as vulnerable to setbacks. A resumption of job growth was seen as the litmus test to sustainability. This potential vulnerability, combined with low core inflation, kept Federal Reserve interest rate policy accommodative during the year, with the key fed funds rate falling and holding at 1%. However, job growth finally accelerated in the second quarter of 2004, raising hopes of a more self-sustaining expansion, but also fears of higher interest rates. In equities, the S&P 500 Index rose 18.33% on a total return basis in the year ended May 31, 2004, with the bulk of the rise concentrated in the third and fourth quarters of last year. Mid Cap and Small Cap stocks were even stronger, with the S&P Mid Cap 400 Index posting a 26.73% gain and the Russell 2000 Index rising 30.29%. On the international front, the MSCI EAFE Index gained 32.66%. Above average gains in the commodity price sensitive sectors helped the Value style generally outperformed Growth for the period. In the fixed-income markets bond yields moved higher over the course of the twelve months, though intra-year volatility was significant. The yield on the 10-year Treasury note fell to as low as 3.11% in June 2003 and rose as high as 4.86% just before the close of the fiscal year in May. The Lehman U.S. Aggregate Bond Index fell a modest 0.44% during the year ending May 31, 2004, though longer-term bonds such as the 10-year Treasury note were considerably weaker falling over 5%. The stronger economy helped credit-sensitive sectors such as High Yield perform well, while Treasury securities generally underperformed. The Fund benefited from its exposure to the Small Cap, Mid Cap, and International markets as well as to the fixed-income High Yield market. The T Shares returned 16.92% in the year ended May 31, 2004, compared with an 11.68% blended benchmark comprised of 65% S&P 500 Index, 25% Lehman U.S. Aggregate Bond Index, and 10% Citigroup 3-Month Treasury Bill Index. As we look ahead the economic expansion looks both solid and sustainable, and is capable of supporting further gains in corporate profits and in equity prices. A key reason for this was the resumption of job growth. However the pace of the expansion is likely to slow as the stimulative benefits of tax rebates and mortgage financing subside. Inflation pressures will increase from their historically low level, putting pressure on the Federal Reserve to begin raising interest rates following a protracted period of stimulus. Bond yields are likely to rise further as the Fed starts to apply monetary restraint, but the pace of rate hikes is expected to be gradual as long as inflation pressures do not escalate sharply. We remain cyclically overweight stocks in the Fund within our asset allocation mix, but we have reduced our weighting in Small Cap stocks given the extreme outperformance by the sector and over the past several years and shifts in some of our key valuation measures. We retained our overweight position in International equities, but are currently neutral in on Growth and Value styles. In the fixed-income segment, we will emphasize mortgage-back and selected corporate bonds as a way to enhance current yield without taking additional maturity risk. In closing, I want to take this opportunity to thank you for investing in the Life Vision Growth and Income Fund. We appreciate your confidence and we will work hard to continue our strong investment performance in the year ahead. Sincerely, /s/Alan M. Gayle Alan M. Gayle Senior Investment Strategist 30 T Shares(1) Average Annual Total Returns (periods ended May 31, 2004) -------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 16.92% 2.47% 3.89% 8.41% 7.94% 139.15% -------------------------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT*
STI Classic Life Vision Lehman Citigroup Growth and Income Fund, 65/25/10 S&P 500 U.S. Aggregate 3-Month Treasury T Shares Hybrid: Index Bond Index Bill Index 5/31/94 10,000 10,000 10,000 10,000 10,000 5/95 11,136 11,649 12,019 11,150 10,524 5/96 13,015 13,939 15,437 11,638 11,102 5/97 14,712 16,936 19,979 12,607 11,686 5/98 17,376 20,838 26,110 13,983 12,300 5/99 18,530 24,087 31,601 14,590 12,886 5/00 19,606 26,036 34,913 14,898 13,556 5/01 20,844 25,223 31,230 16,851 14,341 5/02 20,255 23,493 26,904 18,218 14,719 5/03 19,181 23,042 24,736 20,327 14,934 5/04 22,426 25,733 29,270 20,238 15,079
A Shares(2) Average Annual Total Returns (periods ended May 31, 2004)
-------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 16.73% 2.41% 3.86% 8.40% 7.92% 138.76% Without Load 12.40% 1.10% 3.07% 7.98% 7.56% 129.85% With Load --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT*
STI Classic Life Vision Lehman Citigroup Growth and Income Fund, 65/25/10 S&P 500 U.S. Aggregate 3-Month Treasury A Shares Hybrid: Index Bond Index Bill Index 5/31/94 9,625 10,000 10,000 10,000 10,000 5/95 11,136 11,649 12,019 11,150 10,524 5/96 13,015 13,939 15,437 11,638 11,102 5/97 14,712 16,936 19,979 12,607 11,686 5/98 17,376 20,838 26,110 13,983 12,300 5/99 18,530 24,087 31,601 14,590 12,886 5/00 19,606 26,036 34,913 14,898 13,556 5/01 20,844 25,223 31,230 16,851 14,341 5/02 20,225 23,493 26,904 18,218 14,719 5/03 19,181 23,042 24,736 20,327 14,934 5/04 22,390 25,733 29,270 20,238 15,079
B Shares(3) Average Annual Total Returns (periods ended May 31, 2004)
-------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 15.99% 2.19% 3.72% 8.32% 7.86% 137.21% Without CDSC 10.99% 0.90% 3.38% With CDSC --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT*
STI Classic Life Vision Lehman Citigroup Growth and Income Fund, 65/25/10 S&P 500 U.S. Aggregate 3-Month Treasury B Shares Hybrid: Index Bond Index Bill Index 5/31/94 10,000 10,000 10,000 10,000 10,000 5/95 11,136 11,649 12,019 11,150 10,524 5/96 13,015 13,939 15,437 11,638 11,102 5/97 14,712 16,936 19,979 12,607 11,686 5/98 17,376 20,838 26,110 13,983 12,300 5/99 18,530 24,087 31,601 14,590 12,886 5/00 19,606 26,036 34,913 14,898 13,556 5/01 20,844 25,223 31,230 16,851 14,341 5/02 20,225 23,493 26,904 18,218 14,719 5/03 19,179 23,042 24,736 20,327 14,934 5/04 22,246 25,733 29,270 20,238 15,079
Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. *For periods prior to June 1997, when the Fund began operating, the performance quoted reflects performance of Crestar Bank's similarly managed asset allocation model, adjusted to reflect the Fund's fees and expenses. The asset allocation model was not a registered mutual fund, and therefore was not subject to certain investment and tax restrictions which may have adversely affected performance. (1) T Shares were offered beginning on June 30, 1997. (2) A Shares were offered beginning on November 5, 2003. A Shares' performance for the periods prior to November 5, 2003 reflects the performance of the Fund's T Shares. The performance of the T Shares has not been adjusted to reflect the higher internal operating expenses of the A Shares. If it had, performance would have been lower than that shown. The cumulative total return of the A Shares from its inception date of November 5, 2003 to May 31, 2004 was 6.32% (3) B Shares were offered beginning on March 11, 2003. B Shares' performance for the periods prior to March 11, 2003 reflects the performance of the Fund's T Shares. The performance of the T Shares has not been adjusted to reflect the higher internal operating expenses of the B Shares. If it had, performance would have been lower than that shown. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 31 STI CLASSIC LIFE VISION MODERATE GROWTH FUND -------------------------------------------- The year ending May 31, 2004 was decidedly brighter for the markets and for investors in the STIClassic Life Vision Moderate Growth Fund (the "Fund"). The economy and corporate profits grew at an above-average pace, Federal Reserve interest rate policy remained low and accommodative, and equity prices moved higher. The Fund, a managed allocation of STI Classic stock and bond funds, continued to outperform its blended benchmark for the past one, three, and five years ended May 31, 2004. Economic growth during the past year was very strong, statistically speaking, though much of the strength was directly attributable to the well-timed interest rate and federal tax cuts that were instrumental in sustaining consumer spending. While this stimulus was an essential element to increased spending, the expansion was not yet self-sustaining, even into early 2004, and so was viewed as vulnerable to setbacks. A resumption of job growth was seen as the litmus test to sustainability. This potential vulnerability, combined with low core inflation, kept Federal Reserve interest rate policy accommodative during the year, with the key fed funds rate falling and holding at 1%. However, job growth finally accelerated in the second quarter of 2004, raising hopes of a more self-sustaining expansion, but also fears of higher interest rates. In equities, the S&P 500 Index rose 18.33% on a total return basis in the year ended May 31, 2004, with the bulk of the rise concentrated in the third and fourth quarters of last year. Mid Cap and Small Cap stocks were even stronger, with the S&P Mid Cap 400 Index posting a 26.73% gain and the Russell 2000 Index rising 30.29%. On the international front, the MSCI EAFE Index gained 32.66%. Above average gains in the commodity price sensitive sectors helped the Value style generally outperformed Growth for the period. In the fixed-income markets bond yields moved higher over the course of the twelve months, though intra-year volatility was significant. The yield on the 10-year Treasury note fell to as low as 3.11% in June 2003 and rose as high as 4.86% just before the close of the fiscal year in May. The Lehman U.S. Aggregate Bond Index fell a modest 0.44% during the year ending May 31, 2004, though longer-term bonds such as the 10-year Treasury note were considerably weaker falling over 5%. The stronger economy helped credit-sensitive sectors such as High Yield perform well, while Treasury securities generally underperformed. The Fund benefited from its exposure to the Small Cap, Mid Cap, and International markets as well as to the fixed-income High Yield market. The T Shares returned 13.35% in the year ended May 31, 2004, compared with an 8.84% blended benchmark comprised of 50% S&P 500 Index, 40% Lehman U.S. Aggregate Bond Index, and 10% Citigroup 3-Month Treasury Bill Index. As we look ahead the economic expansion looks both solid and sustainable, and is capable of supporting further gains in corporate profits and in equity prices. A key reason for this was the resumption of job growth. However the pace of the expansion is likely to slow as the stimulative benefits of tax rebates and mortgage financing subside. Inflation pressures will increase from their historically low level, putting pressure on the Federal Reserve to begin raising interest rates following a protracted period of stimulus. Bond yields are likely to rise further as the Fed starts to apply monetary restraint, but the pace of rate hikes is expected to be gradual as long as inflation pressures do not escalate sharply. We remain cyclically overweight stocks in the Fund within our asset allocation mix, but we have reduced our weighting in Small Cap stocks given the extreme outperformance by the sector and over the past several years and shifts in some of our key valuation measures. We retained our overweight position in International equities, but are currently neutral in on Growth and Value styles. In the fixed-income segment, we will emphasize mortgage-back and selected corporate bonds as a way to enhance current yield without taking additional maturity risk. In closing, I want to take this opportunity to thank you for investing in the Life Vision Moderate Growth Fund. We appreciate your confidence and we will work hard to continue our strong investment performance in the year ahead. Sincerely, /s/Alan M. Gayle Alan M. Gayle Senior Investment Strategist 32 T Shares(1) Average Annual Total Returns (periods ended May 31, 2004) -------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 13.35% 2.96% 3.72% 7.80% 7.35% 124.71% -------------------------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT*
STI Classic Life Vision Lehman Citigroup Moderate Growth Fund, 50/40/10 S&P 500 U.S. Aggregate 3-Month Treasury T Shares Hybrid: Index Bond Index Bill Index 5/31/94 10,000 10,000 10,000 10,000 10,000 5/95 11,106 11,519 12,019 11,150 10,524 5/96 12,677 13,362 15,437 11,638 11,102 5/97 14,162 15,810 19,979 12,607 11,686 5/98 16,584 18,983 26,110 13,983 12,300 5/99 17,657 21,472 31,601 14,590 12,886 5/00 18,444 22,943 34,913 14,898 13,556 5/01 19,418 23,032 31,230 16,851 14,341 5/02 19,123 22,207 26,904 18,218 14,719 5/03 18,700 22,438 24,736 20,327 14,934 5/04 21,197 24,422 29,270 20,238 15,079
A Shares(2) Average Annual Total Returns (periods ended May 31, 2004)
-------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 13.18% 2.91% 3.69% 7.78% 7.33% 124.37% Without Load 8.95% 1.60% 2.90% 7.37% 6.98% 116.03% With Load --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT*
STI Classic Life Vision Lehman Citigroup Moderate Growth Fund, 50/40/10 S&P 500 U.S. Aggregate 3-Month Treasury A Shares Hybrid: Index Bond Index Bill Index 5/31/94 9,625 10,000 10,000 10,000 10,000 5/95 11,106 11,519 12,019 11,150 10,524 5/96 12,677 13,362 15,437 11,638 11,102 5/97 14,162 15,810 19,979 12,607 11,686 5/98 16,584 18,983 26,110 13,983 12,300 5/99 17,657 21,472 31,601 14,590 12,886 5/00 18,444 22,943 34,913 14,898 13,556 5/01 19,418 23,032 31,230 16,851 14,341 5/02 19,123 22,207 26,904 18,218 14,719 5/03 18,700 22,438 24,736 20,327 14,934 5/04 21,165 24,422 29,270 20,238 15,079
B Shares(3) Average Annual Total Returns (periods ended May 31, 2004)
-------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 12.66% 2.66% 3.54% 7.71% 7.27 122.75% Without CDSC 7.66% 1.38% 3.21% With CDSC --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows: COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT*
STI Classic Life Vision Lehman Citigroup Moderate Growth Fund, 50/40/10 S&P 500 U.S. Aggregate 3-Month Treasury B Shares Hybrid: Index Bond Index Bill Index 5/31/94 10,000 10,000 10,000 10,000 10,000 5/95 11,106 11,519 12,019 11,150 10,524 5/96 12,677 13,362 15,437 11,638 11,102 5/97 14,162 15,810 19,979 12,607 11,686 5/98 16,584 18,983 26,110 13,983 12,300 5/99 17,657 21,472 31,601 14,590 12,886 5/00 18,444 22,943 34,913 14,898 13,556 5/01 19,418 23,032 31,230 16,851 14,341 5/02 19,123 22,207 26,904 18,218 14,719 5/03 18,651 22,438 24,736 20,327 14,934 5/04 21,012 24,422 29,270 20,238 15,079
Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. *For periods prior to June 1997, when the Fund began operating, the performance quoted reflects performance of Crestar Bank's similarly managed asset allocation model, adjusted to reflect the Fund's fees and expenses. The asset allocation program was not a registered mutual fund, and therefore was not subject to certain investment and tax restrictions which may have adversely affected performance. (1) T Shares were offered beginning on June 30, 1997. (2) A Shares were offered beginning on October 10, 2003. A Shares' performance for the periods prior to October 10, 2003 reflects the performance of the Fund's T Shares. The performance of the T Shares has not been adjusted to reflect the higher internal operating expenses of the A Shares. If it had, performance would have been lower than that shown. The cumulative total return of the A Shares from its inception date of October 10, 2003 to May 31, 2004 was 5.79%. (3) B Shares were offered beginning on March 11, 2003. B Shares' performance for the periods prior to March 11, 2003 reflects the performance of the Fund's T Shares. The performance of the T Shares has not been adjusted to reflect the higher internal operating expenses of the B Shares. If it had, performance would have been lower than that shown. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 33 STI CLASSIC MID-CAP EQUITY FUND ------------------------------- The STI Classic Mid-Cap Equity Fund (the "Fund") seeks capital appreciation by investing primarily in the stocks of companies with a market capitalization between $500 million and $10 billion, or in the Russell Midcap Index. Mid cap securities that offer above average stock price appreciation relative to other securities in the same economic Sector drive our investment philosophy. Proprietary Sector based models to rank stocks have been utilized in each Sector in the mid cap market. These models utilize fundamental stock characteristics such as growth rates and cashflows. Fundamental research is used in the creation, maintenance, and enhancement of the Sector based models to reflect changes in the mid cap market. For the fiscal year ending May 31, 2004 the Fund's T Shares returned 18.70% versus a return of 27.18% for the Russell Midcap Index, and 24.77% for the Lipper Mid Cap Core Funds Classification. While on an absolute basis these results are positive, versus the strategy's Benchmark and Peer Group, the results were disappointing. When one dissects the past twelve months of returns for our strategy and the Russell Midcap, the categories of low price, high beta and low quality provided unusually robust returns. While the Russell Midcap returned 27.18%, the highest price, usually considered higher quality, decile of stocks, as of May 31, 2003, returned 21.58% over the subsequent twelve months. The lowest price, usually considered lower quality, decile of stocks, as of May 31, 2003, returned 36.91% over the subsequent twelve months. If one looks deeper into this lowest price decile of stocks as of May 31, 2003, and further segments stocks by quality of earnings and valuation, the lowest quartile of stocks as measured by quality of earnings stocks as well as the highest quartile of stocks as measured by most over-valued, all returned more than 40%. Approximately half of the underperformance over the past twelve months was the result of our investment process not working particularly well in this type of environment. The other half of the underperformance was due to the implementation and/or stock selection short comings. The Sector based models can be compared to target marketing. In order to reach as many people in the country, a commercial during the Superbowl or Indianapolis 500 might be implemented. If one is trying to reach a population in a given metropolitan area, an ad in the newspaper with the widest circulation in that metropolitan area might be more effective, independent of the cost involved. If one is trying to reach a specific group of individuals in a given metropolitan area, an ad in the newspaper with the widest circulation in that metropolitan area, might not reach those target group of individuals. The target person might not subscribe to that paper. The target person might not find the ad in a large newspaper. A much more targeted approach may be necessary. A database of names and addresses that has been shown to reach that targeted group of individuals can be built. Many investment strategies rely on a commercial at the Superbowl. In the past, we have tried to use the equivalent of an ad in the newspaper in the metropolitan area. This approach has worked reasonably well until this past twelve months. I will discuss specific stock examples of one success and two failures in the prior Sector based, or newspaper ad approach that has been used during most of the past twelve months. By highlighting different features of these three stocks, I will try to reflect some of the different factors that have been deployed in three different Sectors in the past. I will then review an even more targeted Industry Group investment strategy that has been recently implemented that is similar to the database of names and addresses approach described above. During the past twelve months, DADE, a Health Care stock, positively affected the portfolio. Dade was purchased in the fall of 2003. Dade is a manufacturer and distributor of in vitro diagnostics (IVD) products and consumables to clinical laboratories. IVD tests are conducted outside the body and are used to analyze samples of patients' bodily fluids in a clinical setting. Strong instrument product placements in 2003 is now leading to a pull through of increasing consumable revenues. This increasing top line, combined with a recent debt upgrade, and thus lower debt payments, has generated positive cashflow momentum. Dade has also been prepaying its debt earlier than anticipated. As other investors have uncovered this de-leveraging story, positive price momentum has developed. Recently, the stock neared full valuation versus other Health Care Equipment and Service companies. We recently took profits in Dade after a 58% return. Dade contributed +.43% versus the benchmark in the past twelve months. AMKOR, an Information Technology stock, negatively affected the portfolio. Amkor was purchased in January of 2004. Amkor is a subcontractor of semiconductor packaging and test services. The semiconductors that Amkor packages and test for its customers ultimately become components in electric systems used in communications, computing, consumer, industrial, automotive, and military applications. Amkor beat the consensus estimate for the 4th quarter and guided up in what is normally a down Q1. This was unusual in the company's history. In order to accommodate this unusually strong demand, there was a need for what was supposed to be one-time CapEx to be put in place. Very short term investors interpreted this negatively and sold the stock off 19% in Q1. At the end of April, the company reported Q1 revenues of $464M versus consensus of $473M and EPS of $.07 versus consensus of $.09. Management was not able to explain why wireless revenues were weak when the overall wireless industry was very strong. Going forward, company guided for second quarter revenue growth of up 5% to 8%. EPS guidance for Q2 was disappointing at a range of $.06 to $.11 versus consen- 34 sus of $.16. The EPS shortfall was the result of a vaguely described additional increase in CapEx. This vagueness may be due to a potential acquisition of new business. Acquisitions have been part of Amkor's past. In the time following the last three acquisitions, the stock has underperformed the overall market as well as the Semiconductor Industry Group. Additionally, there was a large increase in litigation costs. While the company expressed confidence in a strong second half 2004, it did not give any specific guidance on how it planned to accomplish this objective. The need to buy growth in a somewhat low margin business in the first place, combined with vague and inconsistent guidance has led us to sell the stock at a 61% loss. The stock is currently trading near where we sold it and has subsequently slightly underperformed the overall market as well as the Semiconductor Industry Group. Amkor contributed -1.13% versus the benchmark in the past 12 months. DIAMOND OFFSHORE, an Energy stock, negatively affected the portfolio. Diamond Offshore was purchased in the spring of 2003. Diamond Offshore engages principally in the contract drilling of offshore oil and gas wells. The company's large, diverse fleet, which includes some of the most technologically-advanced rigs in the world, enables it to offer a range of services worldwide in various markets, including the deep water, harsh environment market. Diamond Offshore had been buying back stock, paying down debt, and was attractive versus other Energy companies on a dividend yield and price to book basis. In the fall of 2003, cashflow from operations started to dip, leading to a halving of the quarterly dividend. Diamond Offshore was no longer attractive on a dividend yield basis and the stock was sold for an 8% loss. Diamond Offshore dramatically underperformed the Energy Sector. Diamond Offshore contributed -0.47% versus the benchmark in the past 12 months. Going forward, the Fund strategy will continue to involve segmenting stocks into different groups, and modeling the drivers of performance in each group. The grouping process has now been significantly refined. Stocks are now grouped into S&P Industry Groups and in some cases Industries for Sectors where there is only one Industry Group, such as Energy. This new strategy allows for even deeper fundamentally based information to be incorporated into the investment process. Using the previous example of Amkor, it will no longer be compared with other Technology companies at the Sector level. It will be compared with other Semiconductor companies at the Industry Group level. In total, 32 different Industry Group or Industry models have been constructed based on backtested results. This new Industry Group based strategy would have outperformed the benchmark by approximately 3% over the past twelve months. The average outperformance of the Industry Group models, over the past thirteen years is approximately 8%, more than double the Sector based models. The Industry Group models are also more consistent, or stable. The "worst" rolling twelve month holding period of the Industry Group based approach led to an "outperformance" of more than 1% versus the Russell Midcap benchmark during the past thirteen years. These additional models were implemented in April and May of 2004. While past model results are not a guarantee of future performance, we are very encouraged about these enhancements. We appreciate your interest in the Fund and look forward to better results based on the equity market reverting to emphasis on the fundamentally based discipline used in our investment process. /s/Kevin W. Shea /s/Chad Deakins Kevin Shea, CFA Chad Deakins, CFA Co-Portfolio Manager Co-Portfolio Manager 35 T Shares Average Annual Total Returns (periods ended May 31, 2004) -------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------------------- 18.70% -1.78% 0.99% 7.63% 7.24% 105.78% -------------------------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: STI Classic Mid-Cap Russell Equity Fund, Midcap T Shares Index 5/31/94 10,000 10,000 5/95 11,256 11,583 5/96 14,131 14,889 5/97 16,142 17,462 5/98 19,554 22,234 5/99 19,869 24,237 5/00 23,664 27,451 5/01 22,026 28,804 5/02 19,694 27,762 5/03 17,580 26,318 5/04 20,868 33,471 A Shares Average Annual Total Returns (periods ended May 31, 2004) -------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date -------------------------------------------------------------------- 18.16% -2.21% 0.54% 7.14% 6.74% 96.17% Without Load -------------------------------------------------------------------- 813.70% -3.44% -0.23% 6.74% 6.34% 88.81% With Load -------------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: STI Classic Mid-Cap Russell Equity Fund, Midcap A Shares Index 5/31/94 9,625 10,000 5/95 10,776 11,583 5/96 13,463 14,889 5/97 15,315 17,462 5/98 18,464 22,234 5/99 18,680 24,237 5/00 22,145 27,451 5/01 20,520 28,804 5/02 18,262 27,762 5/03 16,237 26,318 5/04 19,186 33,471 L Shares Average Annual Total Returns (periods ended May 31, 2004) ------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ------------------------------------------------------------------- 17.51% -2.82% -0.07% 5.85% 66.61% Without CDSC ------------------------------------------------------------------- 15.51% With CDSC ----------------- [Line Graph omitted] Plot points are as follows: STI Classic Mid-Cap Russell Equity Fund, Midcap L Shares Index 6/30/95 10,000 10,000 5/96 11,839 12,436 5/97 13,385 14,585 5/98 16,035 18,571 5/99 16,125 20,244 5/00 19,006 22,929 5/01 17,508 24,059 5/02 15,488 23,188 5/03 13,674 21,983 5/04 16,069 27,957 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 36 This page left intentionally blank. STI CLASSIC MID-CAP VALUE EQUITY FUND ------------------------------------- The primary emphasis of the STI Classic Mid-Cap Value Equity Fund (the "Fund") is capital appreciation and income. The Fund seeks to achieve this goal through investing within mid-cap companies with market capitalizations between $1 and $12 billon that are believed to be undervalued. Our philosophy is that superior returns can be achieved by investing in dividend-paying companies that are trading at a valuation discount to their history, their peers or to the market. The Fund utilizes a disciplined, "bottoms-up" approach of seeking out undervalued companies that display characteristics of financial strength. This examination is centered on traditional financial statement analysis. The Fund attempts to identify those companies with improving fundamentals and/or some catalyst that will increase the likelihood of the stock's value being realized. It is important to note that the Fund also employs an active sell discipline should a stock's dividend policy, valuation or fundamentals change. For the trailing 12-month period ending May 31, 2004, the Russell Midcap Value Index performed extremely well, returning 27.19% with strong performance across all sectors, most notably Technology, Industrials and Consumer Discretionary. However, the largest contributing sector was Finance due to its heavy 32% plus weighting in the index and it's approximate 26% return for the period. The current market rally began in the first quarter of 2003 and was fueled by rising corporate profits, a very accommodative monetary and fiscal policy, and improving investor confidence. The Fund's TShares achieved a total return of 27.71% over the 12-months ending May 31, 2004. In the context of our expectations, this return was satisfactory. This performance can be attributed primarily to the overweight in the Industrials sector. One of the best performers in the Industrials sector was Empresa Brasileira de Aeronautica ("Embraer"), a regional jet manufacturer based in Brazil. The stock was up 75% over the last twelve months. This stellar performance was due primarily to Embraer receiving multiple orders for their newest regional jet design, the ERJ 190. The demand for the ERJ 190 is strong due to the improved efficiency it offers to the airlines which operate the aircraft. Another favorite pick for the Fund was Brink's, a provider of business and personal security services. Brink's was up 96% over the last twelve months due to the company's selling its non-core assets and using the proceeds to fund a legacy liability. Therefore, the stock's appreciation is a result of the market focusing on the true value of the core security operations. Stock selection was satisfactory across most sectors although the Fund could have done a better job of asset allocation and stock selection in the Finance sector. The underweight in Finance was not driven by a lack of confidence in the fundamentals of banks, brokers or insurance companies, but by a lack of confidence in the fundamentals and valuations of the REIT (Real Estate Investment Trust) sector. Over the past year of low interest rates and low inflation, stocks have performed well. Looking ahead, the stellar performance of the stock market is now being tempered by many forces. These forces include such things as the threat of inflation, high valuations, rising interest rates, high oil prices, the presidential elections, and geo-political uncertainty. In this type of environment we believe that our process, which uncovers higher quality companies with active dividend policies, further positions the Fund to continue to perform well. We thank you for your participation in the STI Classic Mid-Cap Value Equity Fund and as always we will do our best to produce the excellent results that our investors have come to expect and deserve. /s/Donald A. Wordell Donald A. Wordell Portfolio Manager 38 T Shares(1) Average Annual Total Returns (periods ended May 31, 2004) ----------------------------------------------- Annualized Cumulative Inception Inception One Year to Date to Date ----------------------------------------------- 27.71% 5.14% 13.34% ----------------------------------------------- [Line Graph omitted] Plot points are as follows: STI Classic Mid-Cap Russell Value Equity Fund, Midcap T Shares Index 11/30/01 10,000 10,000 5/02 10,965 11,212 5/03 8,876 10,570 5/04 11,336 13,444 A Shares(2) Average Annual Total Returns (periods ended May 31, 2004) -------------- Cumulative Inception to Date -------------- 16.73% Without Load -------------- 12.30% With Load -------------- [Line Graph omitted] Plot points are as follows: STI Classic Mid-Cap Russell Value Equity Fund, Midcap A Shares Index 10/31/03 9,625 10,000 5/04 10,945 11,107 L Shares(1) Average Annual Total Returns (periods ended May 31, 2004) ------------------------------------------ Annualized Cumulative Inception Inception One Year o Date to Date ------------------------------------------ 27.06% 4.50% 11.62% Without CDSC ------------------------------------------ 25.06% With CDSC --------------- [Line Graph omitted] Plot points are as follows: STI Classic Mid-Cap Russell Value Equity Fund, Midcap L Shares Index 11/30/01 10,000 10,000 5/02 10,924 11,212 5/03 8,785 10,570 5/04 11,163 13,444 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. (1) T Shares and L Shares were offered beginning on November 30, 2001. (2) A Shares were offered beginning on October 27, 2003. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 39 STI CLASSIC SMALL CAP GROWTH STOCK FUND --------------------------------------- The STIClassic Small Cap Growth Stock Fund's (the "Fund") investment philosophy is based on the premise that a portfolio of small cap stocks with positive earnings trends, reasonable valuation, and strong business fundamentals will provide superior returns over time. Fund management believes in executing a disciplined and objective investment process and controlling risk through a broadly diversified portfolio. In selecting stocks for the Fund, the management team looks for companies with strong current and projected earnings growth, improving profitability trends, a strong balance sheet, and high quality earnings. In addition, the business fundamentals of each company are rigorously scrutinized to determine the sustainability of a company's earnings growth prospects. Lastly, the Fund focuses on those companies that have the best combination of the above characteristics and purchases them at reasonable valuations. If the last fiscal year ending May 2003 represented the inflection point for the stock market, then fiscal year 2004 was the inflection point for the economy. That makes sense, since the stock market tends to discount good or better economic news on the horizon. Strong corporate profit reports, an improving economic backdrop, and easy monetary policy set the stage for a broad market advance, characterized by participation from stocks across all market capitalizations and investment styles. For most of the year, the market favored Small Cap companies over Large Caps. But drilling down even further, the market really rewarded companies with higher beta, lower quality, lower liquidity, lower share prices, and lower profitability. In general, these are common characteristics of smaller and micro-cap companies. While the size advantage was clearly in favor of small caps, the market did not distinguish materially between the Growth and Value styles among Small Cap stocks. For the year ending May 31, 2004, the Fund's T Shares returned 33.31% versus the 30.13% return for the S&P Small Cap 600/BARRA Growth Index, outpacing the small cap growth benchmark. By comparison, the S&P 500 Index of large cap stocks was up 18.33% for the year, highlighting the small cap advantage during this period. The Fund's one year return (T Shares) was well ahead of the Lipper Small Cap Growth Funds Classification return of 26.96%, ranking it in the 18th percentile for the period within the small cap growth peer group. For the three year period ending May 31, the Fund's annualized return of 4.06% was well ahead of the -1.0% return for the Lipper average, ranking it in the 17th percentile for the period. Strong stock selection across the entire portfolio was the dominant factor leading to the Fund's out-performance relative to the small cap growth benchmark. Despite the market's bias toward lower quality and lower profitability companies, the Fund still managed to post solid results. We have always focused on profitable companies demonstrating growth in earnings, sales and cash flow, and this year was no exception. One of the key underlying factors to our stock selection success was our focus on companies with improving profitability metrics, like operating margins, return on equity, and cash flow return on investment. Some of our most successful companies for the year fit this description, such as GEVITY HR, TRANSACT TECHNOLOGIES, SONIC SOLUTIONS, and DITECH COMMUNICATIONS. Also, more modestly impacting results was the Fund's position within stocks under $500 million in market cap. While not a conscious decision, at May 31 year end, roughly 25% of the companies in the Fund had market caps under $500 million. The bottom-up stock selection process identified these companies because of their combination of strong earnings trends, improving profitability, solid fundamentals, and reasonable valuation. Many smaller or micro-cap companies possessed the best combination of growth and value in our universe. For example, the Fund purchased SONIC SOLUTIONS in May 2003 at a price/earnings ratio of 14 with a sales growth rate of 70% and projected earnings growth of 70%. At the time of purchase, the company had a market cap of $118 million. After more than a three-fold move, the company's market cap has risen to $450 million. This company was truly an example of buying growth at a discount or value price. With regard to stock selection by sector, those sectors within the Fund that performed best were Industrials, up 42%, Materials, up 46%, Consumer Staples, up 79%, Consumer Discretionary, up 41%, Health Care up 37%, and Finance up 32%. The Technology sector, up a lowly 30%, actually hindered performance as the sector lagged in the later stages of the fiscal year. The Fund's stock selection within each sector outperformed the corresponding sector for the index benchmark, except for the Energy sector. The most significant contributors to relative performance or those sectors that had the most positive stock selection were Industrials, Financials, and Consumer Staples. These sectors made up 3.5% of the excess return versus the benchmark with the heavily weighted Industrials sector contributing more than half. Looking at individual companies that helped make money for our shareholders, we can point to a number of success stories. The following are those that had the most significant impact on performance over the past year: SONIC SOLUTIONS, JOS A. BANK CLOTHIERS, NAM TAI ELECTRONICS, GEVITY HR, ULTIMATE SOFTWARE GROUP, CYPRESS SEMICONDUCTOR, SCHNITZER STEEL, TRANSACT TECHNOLOGIES, AMERICAN HEALTHWAYS, R&G FINANCIAL, and MARTEK BIOSCIENCES. Making a return appearance from last year's annual report is Jos A. Bank Clothiers, the men's retail clothier. The company continues to be one of the top growth stories in the retail sector and was able to grow its sales and earnings at rates of 27% and 67%, respectively, over the past 40 year. The company has been able to leverage the sales of its larger store base to expand operating margins from 8.3% to 11.3%. The stock has been volatile over the past year due to short sellers creating controversy surrounding its inventory management strategy. However, the company's fundamentals have remained solid, as earnings estimates for the current year have increased from $1.37 to $2.05. As a result, the stock increased 86% over the past year despite the volatility. We remain confident in management's strategy and execution and like the valuation at roughly 14 times earnings. TRANSACT TECHNOLOGIES has been one of the Fund's top performing companies since its inclusion in the portfolio last fall 2003. The company designs and manufactures specialty, transaction-based printers for the gaming and lottery, retail point-of-sale, and branch banking markets. In a development agreement with Hewlett Packard, the company's printing technology, which is cheaper, faster, and quieter, has become the standard for the gaming industry and has enabled the company to penetrate and gain share in the other two markets it serves. In addition, the company has begun to generate a higher margin, recurring revenue stream on its product sales, providing the maintenance service and the replacement cartridges to its customers. Earnings estimates for 2004 have risen from $0.41 to $0.53, while revenues have risen 70% for the past 3 quarters, and the stock price has risen roughly 170% from original purchase. GEVITY HR provides human resources outsourcing solutions to small and medium-sized businesses. With under-utilized capacity on its human resources platform, the company can layer on additional business at minimal cost with high incremental margins. In addition, the company has the ability to raise prices, as their product had been priced well below that of its competition. And last, the company benefits from an improving economy, small business creation, and higher employment levels. The leverage of the company's business model and recurring revenue stream can be seen from the substantial increase in 2004 earnings estimates from $0.53 to $1.05 over the past year. MARTEK BIOSCIENCES has a patented process of producing nutritional oils from micro-algae. These nutritional oils are comprised of fatty acid components that promote mental, cardiovascular, and nervous system development and health. The company's product is primarily being used in infant formula, but the potential for additional food additive applications is extensive. Currently, Martek is selling its product as fast as it can produce it, as it is capacity constrained. The company has been working to increase capacity in order to meet current demand from infant formula manufacturers and to sell into new markets. With a market all to itself, the company is projected to produce 70% revenue growth through 2005. In the latter stages of the year, we saw a shift in the underlying trends driving the market. No longer were smaller cap, lower quality, and lower profitability companies leading the market. While a new definitive trend does not appear to have developed, history suggests that following strong broad market advances driven by liquidity, the stock market subsequently becomes more selective. We may very well be entering the proverbial "stock-picker's" market, where earnings growth, balance sheet quality, high profitability, and valuation in tandem are paramount for stock selection success. Our investment approach with a focus on all the aforementioned factors should benefit in such an environment. Specifically, with regard to stock selection, Fund management will continue to focus on companies demonstrating accelerating earnings and sales momentum and positive estimate revisions. In addition, companies should demonstrate improving profitability trends, strong organic (non-acquisition) growth, low-debt balance sheets, and a history of wealth creation for its shareholders. Additionally, Fund management will focus on the fundamental drivers and catalysts for continued business success that will drive sustainable earnings and revenue growth. And last, valuation analysis, even for growth investors, is absolutely critical to evaluate a stock's risk/reward potential. With regard to portfolio construction, Fund management will adhere to our stated objectives of controlling risk through broad diversification and maintaining an equal-weighted portfolio approach. As such, this includes trimming or taking profits more readily in oversized positions and a constant re-evaluation of the risk/reward potential of successful stocks and top holdings. Lastly, with regard to sell discipline, this is a daily task that Fund management focuses on as much as, or more than, the stock selection decision. Despite our focus and best efforts, there is always room for improvement in the execution of the discipline. The overall combined effect of these efforts is to maintain a portfolio of companies, on an ongoing basis, that exhibit a strong earnings trend profile, high profitability characteristics, strong fundamentals, and reasonable valuation. /s/Mark D. Garfinkel Mark D. Garfinkel, CFA Portfolio Manager 41 T Shares Average Annual Total Returns (periods ended May 31, 2004) ------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ------------------------------------------------------------------- 33.31% 4.00% 9.21% 15.57% 126.33% ------------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: STI Classic Small Cap S&P Small Cap Growth Stock Fund, 600/BARRA Growth T Shares Index 10/31/98 10,000 10,000 5/99 12,070 11,226 5/00 15,358 13,867 5/01 16,637 13,474 5/02 15,714 13,857 5/03 14,064 12,901 5/04 18,749 16,788 A Shares(1) Average Annual Total Returns (periods ended May 31, 2004) ----------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ----------------------------------------------------------------- 32.80% 3.71% 8.86% 15.24% 122.75% Without Load ----------------------------------------------------------------- 27.86% 2.40% 8.03% 14.46% 114.39% With Load ----------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: STI Classic Small Cap S&P Small Cap Growth Stock Fund, 600/BARRA Growth A Shares Index 10/31/98 9,625 10,000 5/99 11,618 11,226 5/00 14,758 13,867 5/01 15,922 13,474 5/02 14,989 13,857 5/03 13,375 12,901 5/04 17,762 16,788 L Shares Average Annual Total Returns (periods ended May 31, 2004) ------------------------------------------------------------------ Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ------------------------------------------------------------------ 31.90% 3.00% 8.09% 14.39% 113.58% Without CDSC ------------------------------------------------------------------ 29.90% With CDSC -------------- [Line Graph omitted] Plot points are as follows: STI Classic Small Cap S&P Small Cap Growth Stock Fund, 600/BARRA Growth L Shares Index 10/31/98 10,000 10,000 5/99 12,004 11,226 5/00 15,119 13,867 5/01 16,206 13,474 5/02 15,153 13,857 5/03 13,425 12,901 5/04 17,708 16,788 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. (1) A Shares were offered beginning on December 12, 1999. A Shares performance for the periods prior to December 12, 1999 reflects the performance of the Fund's T Shares. The performance of the T Shares has not been adjusted to reflect the higher internal operating expenses of the A Shares. If it had, performance would have been lower than that shown. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 42 This page left intentionally blank. STI CLASSIC SMALL CAP VALUE EQUITY FUND --------------------------------------- The STI Classic Small Cap Value Equity Fund's ("the Fund") primary goal is income generation and capital appreciation. The Fund seeks to achieve these goals by investing in small-capitalization ($50 million to $2 billion) securities that are perceived to be undervalued and place an emphasis on paying a dividend. The Fund's investment philosophy is based on our belief that dividends are not only an important element of total return, but are a solid indicator of a company's future earnings potential. The Fund utilizes a strict process for constructing the portfolio. The "bottoms-up" approach seeks dividend-paying stocks that are trading at the lower end of their historical valuations and also identifies companies that display characteristics of financial strength. The next step in the process is to identify a catalyst or fundamental change that will assist the stock in realizing its true value. This purchase process allows the Fund to maintain a strict and active sell discipline. The Fund manager is very disciplined and dedicated to minimizing risk by continuously monitoring equity positions to swiftly address issues that arise. For the twelve month period ending May 31, 2004, the Russell 2000 Value Index (the "Index") advanced 30.81%. This large gain was a result of numerous events such as the removal of Saddam Hussein from power in Iraq, rising investor expectations of the economy and a very accommodating Federal Reserve. The combination of these positive events produced only a short-lasting effect on investors and the market. Fears of inflation and rising interest rates have begun to penetrate the vibrant enthusiasm that was prevalent at the start of the year. Higher energy prices have remained and placed an extra burden on consumers. Adding to an already difficult time in the market, uncertainties due to the upcoming presidential elections, coupled with reservations about the economy stalling, impact the current environment. China, a major global economic driver, has also experienced a slowing economy. The Fund's T Shares maintained its record of success, returning 33.56% over the 12-month period ending May 31, 2004. The Fund benefited from superior stock selection in Industrials and Information Technology. The Fund's investment in BRINK'S (BCO), a leading security services company, and EMPRESA BRASILEIRA DE AERONAUTICA (ERJ), an emerging regional jet manufacturer, enabled the Fund to outperform the Index in the Industrials sector for the twelve month period ending May 31, 2004. The Fund's investment in AUTODESK (ADSK), an innovative design software and digital content company, and HARRIS (HRS), an international communication equipment company; were examples of superior stock selections which contributed to the Fund's excess return versus the index in Information Technology. Additionally, the Fund benefited from underweight positions in the Finance and Utilities sector. The Fund continues to be cautious on valuations in the Small Cap Value equity arena. Large inflows of capital from non-traditional Small Cap Value investors such as hedge funds, large cap investors and performance chasers are skewing valuations to the upside for most securities in the universe. This phenomenon has, in turn, caused lower quality names to increase in price, making stock selection an even more important component of performance. These non-traditional investors may also place undo downside pressure on valuations when they eventually decide to exit the Small Cap realm. The Fund will continue to pursue and take advantage of investing in international companies as they frequently offer a better risk/return trade off than domestic companies. We continue to remain cautiously optimistic on the small cap arena and all of the companies the Fund owns. We thank you for you continued interest in the STI Classic Small Cap Value Equity Fund and look forward to continued success. /s/Brett Barner Brett Barner, CFA Portfolio Manager 44 T Shares(1) Average Annual Total Returns (periods ended May 31, 2004) ------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ------------------------------------------------------------------- 33.56% 15.03% 14.53% 15.24% 298.68% ------------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: STI Classic Small Cap Russell 2000 Value Equity Fund, Value T Shares Index 8/31/94 10,000 10,000 5/95 11,432 10,471 5/96 15,171 13,273 5/97 20,138 16,010 5/98 24,888 20,280 5/99 20,229 18,347 5/00 19,274 18,300 5/01 26,194 23,684 5/02 31,448 27,336 5/03 29,848 25,285 5/04 39,865 33,076 A Shares(2) Average Annual Total Returns (periods ended May 31, 2004) ----------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ----------------------------------------------------------------- 32.92% 14.85% 14.42% 15.18% 296.78% Without Load ----------------------------------------------------------------- 27.98% 13.38% 13.55% 14.74% 282.21% With Load ----------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: STI Classic Small Cap Russell 2000 Value Equity Fund, Value A Shares Index 8/31/94 9,625 10,000 5/95 11,004 10,471 5/96 14,602 13,273 5/97 19,383 16,010 5/98 23,955 20,280 5/99 19,471 18,347 5/00 18,552 18,300 5/01 25,212 23,684 5/02 30,269 27,336 5/03 28,728 25,285 5/04 38,186 33,076 L Shares(3) Average Annual Total Returns (periods ended May 31, 2004) ------------------------------------------------------------------ Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ------------------------------------------------------------------ 32.20% 13.86% 13.34% 14.38% 270.74% Without CDSC ------------------------------------------------------------------ 30.20% With CDSC -------------- [Line Graph omitted] Plot points are as follows: STI Classic Small Cap Russell 2000 Value Equity Fund, Value L Shares Index 8/31/94 10,000 10,000 5/95 11,432 10,471 5/96 15,171 13,273 5/97 20,138 16,010 5/98 24,627 20,280 5/99 19,819 18,347 5/00 18,700 18,300 5/01 25,114 23,684 5/02 29,865 27,336 5/03 28,043 25,285 5/04 37,073 33,076 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. *For periods prior to January 1997, when the Fund began operating, the performance quoted reflects performance of the Adviser's similarly managed collective investment fund, adjusted to reflect fees and expenses of the Fund's T Shares. The collective investment fund was not a registered mutual fund, and therefore was not subject to certain investment and tax restrictions which may have adversely affected performance. (1) T Shares were offered beginning January 31, 1997. (2) A Shares were offered beginning on October 9, 2003. AShares' performance for the periods prior to October 9, 2003 reflects the performance of the Fund's T Shares. The performance of the TShares has not been adjusted to reflect the higher internal operating expenses of the AShares. If it had, performance would have been lower than that shown. The cumulative total return of the AShares from its inception date of October 9, 2003 to May 31, 2004 was 15.51%. (3) L Shares were offered beginning on June 6, 1997. L Shares' performance for periods prior to June 6, 1997 reflects performance of the T Shares. T Shares have lower expenses than L Shares, which results in higher performance for L Shares than it would have been had the expenses of that class been applied. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 45 STI CLASSIC STRATEGIC QUANTITATIVE EQUITY FUND ---------------------------------------------- The STIClassic Strategic Quantitative Equity Fund ("the Fund") strives, through the use of disciplined quantitative modeling, to objectively and consistently identify those companies with the most attractive earnings growth prospects and valuation characteristics within each sector. The evaluation characteristics vary by sector. For some sectors, attractive stocks are selected based solely upon growth characteristics. In other sectors, a combination of growth and valuation characteristics is used to identify attractive stocks. The Fund invests in companies of all sizes provided they have growth potential. The Adviser believes that companies with higher earnings growth prospects will tend to have more highly valued share prices. Companies producing sustained accelerating rates of earnings growth will often generate increasing stock valuations. Companies producing sustained decelerating rates of earnings growth may generate decreasing stock valuations. The Adviser calls this cycle of accelerating earnings growth with increasing stock valuation and decelerating earnings growth with decreasing stock valuation the earnings-valuation cycle. The Adviser believes that earnings-valuation cycles dictate stock performance, earnings-valuation cycles differ among market sectors, and diversification controls risk. The Adviser uses quantitative modeling techniques to evaluate and select the common stock of companies based upon this belief in the earnings-valuation cycle. The Fund's T Shares were launched on August 7, 2003. The Fund's A Shares were launched on October 9, 2003. The Fund's L Shares were launched on October 8, 2003. Since the Fund launched T Shares on August 7, 2003, the S&P 500 Index, the Fund's primary benchmark, appreciated 16.7% including reinvested dividends, the S&P Mid-Cap 400 Index appreciated 24.5%, and the S&P Small Cap 600 Index appreciated 26.2%. The S&P 500 Index essentially went straight up from the time of the Fund's inception until late January 2004. Throughout 2003, the market increasingly rewarded news on an improving economy and better corporate profits. Mid-Cap and Small-Cap stocks appreciated more than the Large-Cap stocks as the market's risk-aversion to smaller companies decreased with the improving economy and better corporate profits. From late January 2004 until early March 2004, the S&P 500 Index was flat. From early March 2004 until May end 2004, the S&P 500 Index sold off 5%, regained the 5% lost ground, sold off 5% again, and then regained some of the lost ground. In 2004, the market struggled with Iraqi war concerns, higher oil prices, increasing inflation, and the outlook for higher interest rates. Since August 7, 2003, the S&P 500 Index performance across sectors was mixed with generally more cyclical sectors outperforming more stable sectors. Energy stocks performed the best appreciating 23.2%, followed by Information Technology stocks, appreciating 19.9%. Health Care stocks appreciated the least, up only 7.3%, weighed down by concerns over increasing government price regulation, particularly in pharmaceuticals. Since inception of the T Shares, the Fund's T Shares have returned 23.43% including dividends. The Fund's T Shares have outperformed the S&P 500 Index, the primary benchmark, by 6.8% since inception of the T Shares. Lipper's Multi-Cap Core Funds' average appreciated 17.4% since inception of the T Shares. The Fund's T Shares have outperformed the Lipper Multi-Cap Core Funds' average by 6.1% since inception of the T Shares. Out of 610 funds in the Lipper's Multi-Cap Core Funds' group, the Fund's T Shares ranked 36th for a 6th percentile rank. Strong stock selection within all sectors drove the Fund T Shares' excess return. While all sectors contributed positively, stock selection within Finance and Consumer Discretionary were particular standouts. Sector allocation detracted slightly from performance. Stock selection with Large-Cap stocks produced approximately 75% of the excess return. /s/Edward E. Best Edward Best, CFA Portfolio Manager 46 T Shares(1) Average Annual Total Returns (periods ended May 31, 2004) -------------- Cumulative Inception to Date -------------- 23.43% -------------- [Line Graph omitted] Plot points are as follows: STI Classic Strategic Quantitative Equity Fund, S&P 500 T Shares Index 8/31/03 10,000 10,000 5/04 11,567 11,262 A Shares(2) Average Annual Total Returns (periods ended May 31, 2004) -------------- Cumulative Inception to Date -------------- 8.48% Without Load -------------- 4.43% With Load -------------- [Line Graph omitted] Plot points are as follows: STI Classic Strategic Quantitative Equity Fund, S&P 500 A Shares Index 10/31/03 9,625 10,000 5/04 10,208 10,773 L Shares(3) Average Annual Total Returns (periods ended May 31, 2004) -------------- Cumulative Inception to Date -------------- 5.34% Without CDSC -------------- 3.34% With CDSC -------------- [Line Graph omitted] Plot points are as follows: STI Classic Strategic Quantitative Equity Fund, S&P 500 L Shares Index 10/31/03 10,000 10,000 5/04 10,362 10,773 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. (1) T Shares were offered beginning on August 7, 2003. (2) A Shares were offered beginning on October 8, 2003. (3) L Shares were offered beginning on October 13, 2003. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 47 STI CLASSIC TAX SENSITIVE GROWTH STOCK FUND ------------------------------------------- The STI Classic Tax Sensitive Growth Stock Fund's (the "Fund") philosophy is to invest in companies with high and stable earnings growth and/or companies with improving earnings growth. Emphasis is placed on financially strong companies (large and mid-sized) which are market leaders in their respective industry segments as demonstrated by revenue growth, market shares and levels of profitability. The key elements of our philosophy are that stocks of quality companies do well over time, good fundamental analysis identifies the sustainability of a company's earnings growth rate, risk control is essential and an active process, and after-tax returns are important. The Fund's approach for controlling risk is to: (1) have a significant exposure to companies with stable earnings growth as well as companies whose earnings growth is more exposed to the growth of the economy as a whole; (2) to be diversified among the major industry sectors; (3) to have representation in very large, and medium sized companies; and (4) to have a portfolio of 50-70 stocks so as to reduce the stock market risk associated with the misfortunes of specific companies. In addition, the Fund manager employs an active sell discipline to weed out companies whose future earnings growth rate has deteriorated or has become significantly more uncertain and also to reduce holdings which have been so successful that they have become a major holding in the Fund. The stock market, as measured by the S&P 500 Index, advanced strongly from the May 31, 2003 level. The Index began the year at 963.59 and ended 16.3% higher at 1120.68. When dividends are included, the total return for the Index was 18.33%. The last 12 months included the end of the bear market, the cessation of formal hostilities in Iraq and the end of the recession. In addition, consumer confidence increased and company earnings improved by more than 20%. From a stock market standpoint, those companies whose earnings and stock prices fell the most during the bear market had the best stock price recoveries as it became evident that they were once again viable concerns. Stock prices of "Blue Chip" companies that survived the recession without much, if any, earnings decline were also up in price over the last 12 months, but not nearly as much as the stock prices of more economically sensitive companies. Against this backdrop, the Fund produced a disappointing result. For the 12 months ended May 31, 2004, the Fund's TShares returned 12.18% compared to 18.33% for the Fund's benchmark index, the S&P 500 Index. This is a large shortfall and warrants a thorough examination. The first question we asked was, "What would the return have been if there weren't any changes made in the Fund?" A Fund manager's worst nightmare is that changes to the Fund result in lower returns than if nothing at all had been done. Fortunately, this was not the case as the buys and sells made during the course of the year modestly added to the Fund's return. We next compared the ten worst performing stocks with the ten best performing stocks to see if we only had a few winners or if the winners were swamped by losers. The ten worst stocks last year averaged a -15.1% change in price while the ten best averaged an impressive gain of 49.8%. So, when the worst and best are averaged, the price impact was 17.3%, slightly higher than the 16.3% price increase of the S&P 500 Index. What did happen last year was that the underlying strategy of the Fund, investing in financially strong, large-cap growth companies, simply did not work well. The table below shows the price change of those companies held at the beginning of the year which had market caps of $100 billion or higher.
May 31, 2004 Market Cap Stock Price Change 12 Months Company ($ in billions) ended May 31, 2004 ------- -------------- ---------------------------- General Electric $317 8.4% Exxon Mobil 284 18.8% Microsoft 283 6.6% Pfizer 269 13.9% Wal-Mart Stores 241 5.9% Citigroup 239 13.2% American International Group 191 26.6% Bank of America 170 12.0% Johnson & Johnson 165 2.5% International Business Machines 151 0.6% Procter & Gamble 139 17.4% ------ AVERAGE PRICE GAIN 11.4%
It is fair to say that these eleven companies can be described as "Blue Chip" stocks. One of the reasons they are considered "Blue Chip" is that their earnings rarely go down. For example, in the recessionary year of 2001 when corporate earnings were down 31%, the earnings of these 11 companies were actually up an average of 8%. So, perhaps it is not too surprising that the stock prices of these types of companies did not rebound as much as the stock prices of companies whose earnings plummeted during the recession and then in the subsequent bear market of 2002. 48 In terms of positioning, a few industry shifts have been made over the last 12 months. The Energy weight in the Fund has doubled from 3% to 6% as it became evident that the trend in energy prices was rising. The exposure to the Industrial sector was also increased about 3% as economic sensitive companies began to exhibit strong growth in revenues and earnings. On the de-emphasis side, the Health Care weighting was reduced by 4% as it looked like the Government was going to play a more active role in keeping the lid on pharmaceutical price increases. Going forward, we want to emphasize our conviction that investing in high quality growth companies is a successful long term strategy. We identify companies that are consistently growing their earnings and/or improving their earnings trends and try to buy them at reasonable prices. Just as importantly, we want to disengage from companies whose long-term earnings growth is slowing and/or where the uncertainty about their future earnings growth rate has risen to an unacceptable level. We appreciate your continued confidence in the Fund and look forward to the future with confidence. /s/Parker W. Thomas, Jr. Parker W. Thomas, Jr. Portfolio Manager 49 T Shares(1) Average Annual Total Returns (periods ended May 31, 2004) ------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ------------------------------------------------------------------- 12.18% -4.47% -4.90% 6.82% 74.30% ------------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: STI Classic Tax Sensitive Growth Stock Fund, S&P 500 T Shares Index 12/31/95 10,000 10,000 5/96 10,767 10,967 5/97 13,971 14,194 5/98 17,311 18,550 5/99 22,402 22,451 5/00 24,750 24,803 5/01 19,995 22,187 5/02 17,386 19,114 5/03 15,540 17,573 5/04 17,432 20,794 A Shares(2) Average Annual Total Returns (periods ended May 31, 2004) ----------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ----------------------------------------------------------------- 11.93% -4.54% -4.94% 6.80% 73.92% Without Load ----------------------------------------------------------------- 7.74% -5.75% -5.66% 6.32% 67.45% With Load ----------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: STI Classic Tax Sensitive Growth Stock Fund, S&P 500 A Shares Index 12/31/95 9,625 10,000 5/96 10,364 10,967 5/97 13,447 14,194 5/98 16,662 18,550 5/99 21,562 22,451 5/00 23,822 24,803 5/01 19,246 22,187 5/02 16,734 19,114 5/03 14,957 17,573 5/04 16,741 20,794 L Shares(3) Average Annual Total Returns (periods ended May 31, 2004) ------------------------------------------------------------------ Annualized Cumulative Inception Inception One Year 3 Years 5 Years to Date to Date ------------------------------------------------------------------ 11.03% -5.48% -5.89% 6.11% 64.72% Without CDSC ------------------------------------------------------------------ 9.03% With CDSC ------------- [Line Graph omitted] Plot points are as follows: STI Classic Tax Sensitive Growth Stock Fund, S&P 500 L Shares Index 12/31/95 10,000 10,000 5/96 10,767 10,967 5/97 13,971 14,194 5/98 17,311 18,550 5/99 22,309 22,451 5/00 24,401 24,803 5/01 19,506 22,187 5/02 16,779 19,114 5/03 14,836 17,573 5/04 16,473 20,794 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. *For periods prior to December 1998, when the Fund began operating, the performance quoted reflects performance of the Adviser's similarly managed collective investment fund, adjusted to reflect the Fund's fees and expenses. The collective investment fund was not a registered mutual fund and therefore was not subject to certain investment and tax restrictions which may have adversely affected performance. (1) T Shares were offered beginning on December 11, 1998. (2) A Shares were offered beginning on October 14, 2003. AShares' performance for the periods prior to October 14, 2003 reflects the performance of the Fund's T Shares. The performance of the T Shares has not been adjusted to reflect the higher internal operating expenses of the AShares. If it had, performance would have been lower than that shown. The cumulative total return of the AShares from its inception date of October 14, 2003 to May 31, 2004 was 4.21%. (3) L Shares were offered beginning on December 15, 1998. L Shares' performance for the periods prior to December 15, 1998 reflects the performance of the Fund's T Shares. The performance of the T Shares has not been adjusted to reflect the higher internal operating expenses of the L Shares. If it had, performance would have been lower than that shown. Returns shown do notreflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 50 This page left intentionally blank. STI CLASSIC VALUE INCOME STOCK FUND ----------------------------------- The STI Classic Value Income Stock Fund ("the Fund") invests primarily in dividend-paying, equity securities to generate income and capital appreciation for its investors. The Fund's investment philosophy is based upon our belief that dividends are not only an important component of total return but also an indication of a company's future earnings potential. The Fund employs a very disciplined and methodical approach to portfolio construction. The "bottom-up" process considers three key factors when making investment decisions: 1) Minimum dividend criteria; 2) Low historical valuation; and 3) A catalyst for improving fundamental business momentum which can cause an upward revaluation in the individual security. Our process seeks dividend-paying stocks that are trading at the lower end of historical valuation ranges. The companies identified for our focused attention are in the midst of fundamental change that we expect will reignite investor interest. They tend to exhibit "value" characteristics such as low price-to-earnings ratios, low price-to-sales ratios and generally have higher dividend yields. The profits cycle was indeed in full swing over the last 12-months as increasing profits allowed for necessary corporate capital expenditures, which jumpstarted job growth and consumer confidence. Disposable income and consumer spending continued to grow, all the while adding to corporate profits and completing the positive feedback loop. For the 12-month period ending May 31, 2004, the overall market rallied nicely, fueled in part by increasing corporate profits and very accommodative fiscal and monetary policies. The Fund's primary benchmark, the Russell 1000 Value Index, advanced 19.82% during this same period with strong showings in most sectors. The exceptions were Health Care and Telecommunications Services which posted nominal returns and were held back by political and regulatory concerns. With its 30%-plus weighting and approximately 22% return, the biggest contributing sector was Finance. The Fund's T Shares performance for the twelve month period ended May 31, 2004 was 19.58%. The strongest contributors to performance for the Fund were Industrials and Materials where, in comparison to its benchmark, the Fund was not only overweight but benefited from better stock selection as well. Our affinity to stocks in these sectors derived from our "bottom-up" process which identifies companies that have done remarkable jobs cutting costs and trimming their respective operating structures during the last economic downturn. Thus, they were thus primed to experience tremendous operating leverage when business activity began picking up like it has over the past 12-months. HONEYWELL INTERNATIONAL is a perfect example. Energized by a new management team, the company repaired its balance sheet and reorganized its cost structure, poising itself for turnaround in earnings growth as well as significant share buyback activity and dividend increases. ALCOA is another example. With a great balance sheet and seasoned management team, Alcoa has been able to position the firm to take advantage of the improving demand for aluminum in the western world as well as reconfigure the asset base to improve return on invested capital. The main detractor from performance this past fiscal year was not company or industry- specific but was macro-related. With the Federal Reserve pushing interest rates to historic lows to spur economic recovery, many lower quality companies benefited from cheap financing and were afforded a rare opportunity to re-liquify their balance sheets and live another day. The types of stocks that had the best performance this past fiscal year were low quality, high volatility, small capitalization companies--the polar opposite of the characteristics of the Fund's core holdings. Other under-performing areas were Utilities and REITs (Real Estate Investment Trust). We never expected interest rates to get as low as they did thus missing a very significant upward move in these sectors as they followed the bond market higher. Although profits are very strong, the stock market has stalled for the time being. Investor confidence is being challenged by a plethora of concerns including: rising interest rates, Iraq, oil prices, China's slowing economy and this year's Presidential election. In this type of investment climate we believe that higher quality companies with active dividend policies are positioned to perform well, particularly if profit growth begins to decelerate from the high double digit levels that the market is currently experiencing. The Fund is overweight in Staples and Health Care, two sectors that have historically performed well when the profits cycle decelerated. We are also maintaining our overweights in Industrials and Materials where we like the balance sheets, management teams and operating leverage that our companies exhibit. The Fund continues to maintain an underweight in Finance as we move through a FED tightening cycle and margins and book values are stressed. We feel quite confident that the Fund is positioned to perform well in the coming months and look forward to continuing to deliver the high quality product that our investors deserve. /s/Mills A. Riddick Mills A. Riddick, CFA Portfolio Manager 52 T Shares(1) Average Annual Total Returns (periods ended May 31, 2004) ------------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date ------------------------------------------------------------------------------- 19.58% 1.00% 1.02% 10.35% 11.58% 394.11% ------------------------------------------------------------------------------- [Line Graph omitted] Plot points are as follows: STI Classic Value Russell S&P 500/BARRA Income Stock Fund, 1000 Value Value T Shares Index** Index 5/31/94 10,000 10,000 10,000 5/95 11,906 11,597 11,707 5/96 15,229 14,637 14,792 5/97 18,607 18,707 18,558 5/98 22,905 24,817 23,925 5/99 25,454 28,423 27,056 5/00 22,776 27,914 27,754 5/01 25,986 30,058 29,733 5/02 25,029 28,389 25,151 5/03 22,391 26,158 22,966 5/04 26,775 31,343 27,681 A Shares(2) Average Annual Total Returns (periods ended May 31, 2004)
---------------------------------------------------------------------------- Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date ---------------------------------------------------------------------------- 19.10% 0.59% 0.62% 9.93% 11.24% 372.54% Without Load ---------------------------------------------------------------------------- 14.61% -0.68% -0.15% 9.51% 10.94% 354.71% With Load ----------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows: STI Classic Value Russell S&P 500/BARRA Income Stock Fund, 1000 Value Value A Shares Index** Index 5/31/94 9,625 10,000 10,000 5/95 11,426 11,597 11,707 5/96 14,555 14,637 14,792 5/97 17,712 18,707 18,558 5/98 21,735 24,817 23,925 5/99 24,063 28,423 27,056 5/00 21,457 27,914 27,754 5/01 24,381 30,058 29,733 5/02 23,372 28,839 25,151 5/03 20,836 26,158 22,966 5/04 24,816 31,343 27,681 L Shares(3) Average Annual Total Returns (periods ended May 31, 2004)
------------------------------------------------------------------------------ Annualized Cumulative Inception Inception One Year 3 Years 5 Years 10 Years to Date to Date ------------------------------------------------------------------------------ 18.27% -0.15% -0.12% 9.25% 10.82% 347.20% Without CDSC ------------------------------------------------------------------------------ 16.27% With CDSC -------------
[Line Graph omitted] Plot points are as follows: STI Classic Value Russell S&P 500/BARRA Income Stock Fund, 1000 Value Value L Shares Index** Index 5/31/94 10,000 10,000 10,000 5/95 11,906 11,597 11,707 5/96 15,063 14,637 14,792 5/97 18,213 18,707 18,558 5/98 22,176 24,817 23,925 5/99 24,374 28,423 27,056 5/00 21,571 27,914 27,754 5/01 24,343 30,058 29,733 5/02 23,170 28,389 25,151 5/03 20,491 26,158 22,966 5/04 24,235 31,343 27,681 Past performance is no indication of future performance. The Fund's comparative benchmarks do not include the annual operating expenses incurred by the Fund. *For periods prior to February 1993, when the Fund began operating, the performance quoted reflects performance of the Adviser's similarly managed collective investment fund. The collective investment fund was not a registered mutual fund and therefore was not subject to certain investment and tax restrictions which may have adversely affected performance. **Previously, the Fund's return had been compared to the S&P 500/BARRA Value Index, but the Adviser believes that the Russell 1000 Value Index is more representative of the Fund's investment universe. (1) T Shares were offered beginning on February 12, 1993. (2) A Shares were offered beginning on February 17, 1993. A Shares' performance for the periods prior to February 17, 1993 reflects the performance of the Fund's T Shares. The performance of the T Shares has not been adjusted to reflect the higher internal operating expenses of the A Shares. If it had, performance would have been lower than that shown. (3) L Shares were offered beginning on June 1, 1995. L Shares' performance for the periods prior to June 1, 1995 reflects the performance of the Fund's T Shares. The performance of the T Shares has not been adjusted to reflect the higher internal operating expenses of the L Shares. If it had, performance would have been lower than that shown. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 53 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 AGGRESSIVE GROWTH STOCK FUND -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK (97.1%) COMMUNICATION SERVICES (1.5%) Nextel Communications* 13,100 $ 303 ------- COMPUTER SOFTWARE (3.6%) Cognizant Technology Solutions* 16,000 740 ------- CONSUMER CYCLICALS (6.8%) Best Buy 7,400 390 Coach* 8,100 353 Tiffany 6,300 223 Walt Disney 18,600 437 ------- 1,403 ------- CONSUMER DISCRETIONARY (9.3%) Avon Products 7,400 656 Clear Channel Communications 7,400 294 Starbucks* 17,500 711 Univision Communications* 8,100 264 ------- 1,925 ------- CONSUMER STAPLES (1.7%) Fred's 5,100 107 Whole Foods Market 2,900 250 ------- 357 ------- FINANCE (12.4%) Blackrock 3,800 240 Capital One Financial 13,000 911 Investors Financial Services 22,300 872 Paychex 5,300 199 SLM 8,800 337 ------- 2,559 ------- HEALTH CARE (21.0%) Align Technology* 12,200 233 Biomet 3,600 144 Biosite* 5,600 223 Cardinal Health 3,600 244 Cephalon* 8,300 447 Forest Laboratories* 9,300 590 Genentech* 4,200 251 Gilead Sciences* 7,600 497 Johnson & Johnson 6,000 334 Martek Biosciences* 4,500 288 Medicis Pharmaceutical 5,500 233 Pfizer 10,000 353 Wilson Greatbatch Technologies* 8,500 231 Wright Medical Group* 8,100 263 ------- 4,331 ------- -------------------------------------------------------------------------------- SHARES/FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- PRODUCER DURABLES (1.8%) Kla-Tencor* 6,700 $ 323 Lam Research* 1,700 42 ------- 365 ------- SEMICONDUCTORS (10.1%) Amkor Technology* 6,900 71 Broadcom, Cl A* 6,000 253 Intel 21,400 611 Omnivision Technologies* 7,100 166 Qualcomm 14,500 972 ------- 2,073 ------- SERVICES (16.5%) CNET Networks* 21,600 209 eBay* 11,100 986 InterActiveCorp* 20,000 625 Omnicom Group 6,500 519 Sohu.com* 5,700 118 Yahoo!* 30,800 944 ------- 3,401 ------- TECHNOLOGY (12.4%) Avaya* 6,400 101 Dell* 11,800 415 eResearch Technology* 11,850 300 Flextronics International Ltd.* 51,600 906 Juniper Networks* 10,100 211 Utstarcom* 20,100 626 ------- 2,559 ------- Total Common Stock (Cost $19,627) 20,016 ------- REPURCHASE AGREEMENT (3.3%) Merrill Lynch 1.020%, dated 05/28/04, to be repurchased in 06/01/04, repurchase price $678,878 (collaterlaized by FHLB obligations; total market value $693,444) (C) $ 679 679 ------- Total Repurchase Agreement (Cost $679) 679 ------- Total Investments (100.4%) (Cost $20,306) 20,695 ------- 54 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES (-0.4%) Investment Advisory Fees Payable $ (17) Payable to Affiliated Funds (7) Administration Fees Payable (1) Receivable from Adviser 6 Receivable from Distributor 3 Other Assets and Liabilities, Net (64) ------- Total Other Assets and Liabilities (80) ------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 2,050,154 outstanding shares of beneficial interest 20,157 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 4,934 outstanding shares of beneficial interest 48 Paid in Capital -- L Shares (unlimited authorization -- no par value) based on 6,528 outstanding shares of beneficial interest 65 Accumulated net investment loss (5) Accumulated net realized loss on investments (39) Net unrealized appreciation on investments 389 ------- Total Net Assets (100.0%) $20,615 ======= Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($20,500,987 / 2,050,154 shares) $10.00 ======= Net Asset Value and Redemption Price Per Share -- A Shares ($49,267 / 4,934 shares) $ 9.99 ======= Maximum Offering Price Per Share -- A Shares ($9.99 / 96.25%) $10.38 ======= Net Asset Value and Offering Price Per Share -- L Shares (1) ($65,098 / 6,528 shares) $ 9.97 ======= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 55 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 BALANCED FUND -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK (50.8%) CAPITAL GOODS (7.3%) 3M 24,000 $ 2,029 American Power Conversion 60,400 1,093 Applied Materials* 147,500 2,944 Danaher 36,000 1,693 Deere 36,600 2,405 Emerson Electric 41,500 2,478 General Dynamics 23,500 2,247 L-3 Communications Holdings 46,200 2,945 Northrop Grumman 23,800 2,455 Parker Hannifin 54,000 3,000 -------- 23,289 -------- COMMUNICATION SERVICES (0.6%) COX Communications, Cl A* 59,700 1,875 -------- COMPUTER SOFTWARE (3.6%) Amdocs* 78,900 1,947 Microsoft 164,500 4,334 Oracle* 149,000 1,687 Peoplesoft* 85,500 1,529 Veritas Software* 71,800 1,910 -------- 11,407 -------- CONSUMER CYCLICALS (9.7%) Bed Bath & Beyond* 67,100 2,499 Costco Wholesale* 41,400 1,564 Home Depot 100,000 3,592 Kohl's* 20,800 989 Lowe's 44,800 2,400 Marriott International 32,000 1,579 May Department Stores 40,800 1,169 Southwest Airlines 151,500 2,350 Staples 56,500 1,558 Target 60,000 2,682 Tiffany 38,000 1,344 TJX 52,500 1,308 Wal-Mart Stores 27,000 1,505 Walgreen 80,000 2,801 Walt Disney 145,000 3,403 -------- 30,743 -------- CONSUMER STAPLES (3.7%) Avon Products 49,700 4,406 Gillette 63,900 2,754 Kimberly-Clark 36,100 2,379 Procter & Gamble 21,600 2,329 -------- 11,868 -------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- ENERGY (2.0%) Anadarko Petroleum 38,200 $ 2,083 Exxon Mobil 97,900 4,234 -------- 6,317 -------- FINANCE (9.9%) Aflac 61,400 2,493 American Express 80,100 4,061 American International Group 48,000 3,518 Bank of New York 48,400 1,455 Chubb 39,000 2,627 Citigroup 76,000 3,529 Goldman Sachs Group 23,100 2,169 MGIC Investment 31,000 2,263 Morgan Stanley 32,000 1,712 State Street 63,500 3,075 Wells Fargo 48,000 2,822 Zions Bancorporation 31,300 1,919 -------- 31,643 -------- HEALTH CARE (5.7%) Biomet 85,000 3,410 Boston Scientific* 79,800 3,535 Johnson & Johnson 56,000 3,120 Pfizer 100,000 3,534 Quest Diagnostics 17,800 1,533 St. Jude Medical* 40,700 3,104 -------- 18,236 -------- SEMICONDUCTORS (1.7%) Analog Devices 29,800 1,465 Intel 88,700 2,532 Microchip Technology 42,400 1,345 -------- 5,342 -------- SERVICES (2.4%) Career Education* 27,600 1,876 Time Warner* 189,500 3,229 United Parcel Service, Cl B 35,000 2,510 -------- 7,615 -------- TECHNOLOGY (4.2%) Agilent Technologies* 52,200 1,342 CDW 20,200 1,419 Cisco Systems* 66,500 1,473 Dell* 37,900 1,333 EMC* 185,000 2,079 Kla-Tencor* 33,900 1,633 Lexmark International* 25,100 2,368 Tellabs* 239,000 1,898 -------- 13,545 -------- Total Common Stock (Cost $146,057) 161,880 -------- 56 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- CORPORATE OBLIGATIONS (25.2%) CAPITAL GOODS (1.2%) Alcan 6.125%, 12/15/33 $ 1,650 $ 1,577 International Paper 6.750%, 09/01/11 785 852 Masco 5.875%, 07/15/12 755 780 Weyerhaeuser 7.950%, 03/15/25 575 643 -------- 3,852 -------- COMMUNICATION SERVICES (2.0%) British Sky Broadcasting 8.200%, 07/15/09 675 779 Comcast 6.500%, 01/15/15 750 779 Cox Communications 7.125%, 10/01/12 745 815 Liberty Media 3.500%, 09/25/06 850 849 Sprint Capital 7.625%, 01/30/11 740 822 U.S. Cellular 6.700%, 12/15/33 780 737 Univision Communications 3.500%, 10/15/07 825 814 Viacom 7.875%, 09/01/23 600 694 -------- 6,289 -------- CONSUMER CYCLICALS (2.3%) Albertson's 7.500%, 02/15/11 695 780 DaimlerChrysler 4.750%, 01/15/08 775 777 Ford Motor 7.450%, 07/16/31 910 862 General Motors 8.375%, 07/15/33 775 807 Kraft Foods 5.250%, 10/01/13 820 793 Kroger 7.800%, 08/15/07 630 702 May Department Stores 7.450%, 09/15/11 765 859 Safeway 6.150%, 03/01/06 765 804 Time Warner 6.750%, 04/15/11 710 765 -------- 7,149 -------- -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- ENERGY (1.2%) Anadarko Petroleum 3.250%, 05/01/08 $ 785 $ 763 Conoco 6.950%, 04/15/29 1,525 1,668 Kerr-McGee 5.875%, 09/15/06 750 788 Petroleos Mexicanos 9.250%, 03/30/18 650 730 -------- 3,949 -------- FINANCE (15.2%) Bank of America 6.500%, 03/15/06 1,725 1,833 Bank One 5.500%, 03/26/07 755 795 Bear Stearns 4.000%, 01/31/08 2,375 2,375 Boeing Capital 6.500%, 02/15/12 1,380 1,472 CIT Group 4.125%, 02/21/06 1,850 1,888 Citicorp Capital I 7.933%, 02/15/27 1,400 1,498 Citigroup Global Markets 6.500%, 02/15/08 1,350 1,467 Devon Financing 6.875%, 09/30/11 660 720 EOP Operating LP 8.375%, 03/15/06 675 736 First Data 3.375%, 08/01/08 910 886 First Union Institutional Capital I 8.040%, 12/01/26 600 653 Fund American 5.875%, 05/15/13 810 806 General Electric Capital 3.500%, 05/01/08 3,195 3,138 Golden West Financial 4.125%, 08/15/07 750 759 Goldman Sachs Capital I 6.345%, 02/15/34 2,400 2,256 Household Finance 5.750%, 01/30/07 1,500 1,584 International Lease Finance 3.750%, 08/01/07 2,280 2,271 JP Morgan Chase 5.250%, 05/30/07 1,465 1,528 MBNA America Bank 5.375%, 01/15/08 665 691 Merrill Lynch, Ser B, MTN 3.375%, 09/14/07 2,315 2,288 57 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 BALANCED FUND--CONCLUDED -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- FINANCE -- CONTINUED MetLife 3.911%, 05/15/05 $ 245 $ 249 Morgan Stanley 3.625%, 04/01/08 1,620 1,599 National Rural Utilities 3.000%, 02/15/06 2,405 2,413 NB Capital Trust IV 8.250%, 04/15/27 1,700 1,879 Prudential Financial 4.750%, 04/01/14 1,680 1,560 Safeco 6.875%, 07/15/07 725 792 Simon Property Group LP 6.375%, 11/15/07 700 749 SLM, MTN 3.625%, 03/17/08 2,415 2,393 Textron Financial, Ser E, MTN 2.750%, 06/01/06 665 661 Verizon Global Funding 7.750%, 12/01/30 680 765 Washington Mutual 4.625%, 04/01/14 810 737 Washington Mutual Financial 8.250%, 06/15/05 1,380 1,463 Well Fargo 3.500%, 04/04/08 2,420 2,380 Wells Fargo Capital I 7.960%, 12/15/26 1,000 1,096 -------- 48,380 -------- HEALTH CARE (0.2%) Wyeth 6.500%, 02/01/34 805 761 -------- TECHNOLOGY (0.5%) Computer Sciences 7.500%, 08/08/05 1,505 1,588 -------- TELEPHONES & TELECOMMUNICATIONS (1.1%) British Telecom 7.875%, 12/15/05 305 328 Deutsche Telekom 8.750%, 06/15/30 660 804 Verizon Global Funding 7.250%, 12/01/10 2,100 2,346 -------- 3,478 -------- TRANSPORTATION (0.5%) Norfolk Southern 7.800%, 05/15/27 675 775 Union Pacific 5.750%, 10/15/07 650 686 -------- 1,461 -------- -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- UTILITIES (1.0%) Alabama Power, Ser X 3.125%, 05/01/08 $ 525 $ 507 Carolina Power & Light 6.500%, 07/15/12 625 672 Pacific Gas & Electric 6.050%, 03/01/34 855 801 Pacificorp 6.900%, 11/15/11 450 502 Southern California Edison 8.000%, 02/15/07 730 811 -------- 3,293 -------- Total Corporate Obligations (Cost $81,400) 80,200 -------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS (7.5%) FHLMC 5.250%, 01/15/06 6,410 6,686 FNMA 6.500%, 07/01/32 719 745 6.000%, 09/01/17 1,080 1,122 5.500%, 10/01/23 2,213 2,230 5.000%, 06/01/33 4,639 4,468 4.500%, 06/01/18 3,052 2,988 GNMA 8.500%, 04/15/31 707 771 8.000%, 08/15/31 to 09/15/31 1,993 2,174 6.000%, 12/15/31 2,658 2,712 -------- Total U.S. Government Agency Mortgage-Backed Obligations (Cost $24,070) 23,896 -------- U.S. TREASURY OBLIGATIONS (5.5%) U.S. Treasury Bonds 6.250%, 08/15/23 4,255 4,683 5.375%, 02/15/31 11,075 11,116 U.S. Treasury Note 4.375%, 08/15/12 1,855 1,841 -------- Total U.S. Treasury Obligations (Cost $18,064) 17,640 -------- U.S. GOVERNMENT AGENCY OBLIGATIONS (3.4%) FHLB 2.625%, 05/15/07 4,725 4,619 FHLMC 5.875%, 03/21/11 2,670 2,795 5.200%, 03/05/19 1,775 1,662 3.875%, 01/12/09 1,650 1,619 -------- Total U.S. Government Agency Obligations (Cost $10,915) 10,695 -------- 58 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- ASSET-BACKED OBLIGATIONS (3.0%) Capital Auto Receivables Asset Trust, Ser 2002-4, Cl A4 2.640%, 03/17/08 $ 1,200 $ 1,200 Citibank Credit Card Issuance Trust, Series 2004-A1, Cl A-1 2.550%, 01/20/09 3,330 3,269 General Electric Commercial Mortgage, Ser 2002-1A, Cl A3 6.269%, 12/10/35 1,790 1,924 Harley-Davidson Motorcycle Trust, Ser 2002-2, Cl A2 3.090%, 06/15/10 800 808 JP Morgan Chase Commercial Mortgage, Series 2004-cb8, Cl A4 4.404%, 01/12/39 2,495 2,316 -------- Total Asset-Backed Obligations (Cost $9,633) 9,517 -------- FOREIGN GOVERNMENT DEBT OBLIGATIONS (0.9%) CANADA (0.7%) Province of Quebec, Ser NN 7.125%, 02/09/24 2,030 2,319 -------- Total Canada (Cost $2,429) 2,319 -------- MEXICO (0.2%) United Mexican States 4.625%, 10/08/08 700 695 -------- Total Mexico (Cost $698) 695 -------- Total Foreign Government Debt Obligations (Cost $3,127) 3,014 -------- REPURCHASE AGREEMENT (3.2%) Deutsche Bank 0.970%, dated 05/28/04, to be repurchased on 06/01/04, repurchase price $9,994,759 (collateralized by U.S. Treasury Notes; total market value $10,194,401) (C) 9,994 9,994 -------- Total Repurchase Agreement (Cost $9,994) 9,994 -------- Total Investments (99.5%) (Cost $303,260) 316,836 -------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES (0.5%) Investment Advisory Fees Payable $ (249) Distribution Fees Payable (53) Administration Fees Payable (19) Custodian Fees Payable (2) Transfer Agent Shareholder Servicing Fees Payable (1) Payable to Adviser (1) Receivable from Affiliated Funds 1 Other Assets and Liabilities, Net 1,867 -------- Total Other Assets and Liabilities 1,543 -------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 19,956,282 outstanding shares of beneficial interest 223,773 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 724,903 outstanding shares of beneficial interest 7,978 Paid in Capital -- L Shares (unlimited authorization -- no par value) based on 5,400,164 outstanding shares of beneficial interest 69,611 Undistributed net investment income 893 Accumulated net realized gain on investments 2,548 Net unrealized appreciation on investments 13,576 -------- Total Net Assets (100.0%) $318,379 ======== Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($244,041,686 / 19,956,282 shares) $12.23 ======== Net Asset Value and Redemption Price Per Share -- A Shares ($8,902,454 / 724,903 shares) $12.28 ======== Maximum Offering Price Per Share -- A Shares ($12.28 / 96.25%) $12.76 ======== Net Asset Value and Offering Price Per Share -- L Shares (1) ($65,434,540 / 5,400,164 shares) $12.12 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 59 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 CAPITAL APPRECIATION FUND -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK (98.8%) CAPITAL GOODS (13.9%) 3M 208,000 $ 17,589 American Power Conversion 539,000 9,756 Applied Materials* 1,410,700 28,158 Danaher 334,000 15,708 Deere 341,100 22,410 Emerson Electric 386,500 23,074 General Dynamics 212,400 20,312 L-3 Communications Holdings 413,400 26,350 Northrop Grumman 221,200 22,812 Parker Hannifin 403,500 22,418 ---------- 208,587 ---------- COMMUNICATION SERVICES (1.1%) COX Communications, Cl A* 509,000 15,988 ---------- COMPUTER SOFTWARE (7.1%) Amdocs* 807,600 19,932 Microsoft 1,400,000 36,890 Oracle* 1,333,300 15,093 Peoplesoft* 759,400 13,578 Veritas Software* 762,400 20,280 ---------- 105,773 ---------- CONSUMER CYCLICALS (18.5%) Bed Bath & Beyond* 541,500 20,171 Costco Wholesale* 384,100 14,511 Home Depot 867,000 31,143 Kohl's* 184,800 8,789 Lowe's 399,800 21,417 Marriott International 297,800 14,690 May Department Stores 365,200 10,467 Southwest Airlines 1,341,500 20,807 Staples 520,000 14,341 Target 562,100 25,126 Tiffany 354,000 12,521 TJX (D) 542,500 13,514 Wal-Mart Stores 239,200 13,331 Walgreen 709,800 24,850 Walt Disney 1,298,000 30,464 ---------- 276,142 ---------- CONSUMER STAPLES (7.0%) Avon Products 439,200 38,939 Gillette 590,000 25,423 Kimberly-Clark 324,600 21,391 Procter & Gamble 180,000 19,408 ---------- 105,161 ---------- ENERGY (3.8%) Anadarko Petroleum 313,700 17,103 Exxon Mobil 908,700 39,301 ---------- 56,404 ---------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- FINANCE (19.2%) Aflac 526,900 $ 21,392 American Express 734,200 37,224 American International Group 425,800 31,211 Bank of New York 443,100 13,324 Chubb 352,000 23,714 Citigroup 693,800 32,213 Goldman Sachs Group 256,300 24,069 MGIC Investment 243,700 17,790 Morgan Stanley 325,000 17,391 State Street 592,000 28,665 Wells Fargo 445,100 26,172 Zions Bancorporation 232,500 14,252 ---------- 287,417 ---------- HEALTH CARE (11.5%) Biomet 680,000 27,282 Boston Scientific* 718,500 31,829 Johnson & Johnson 550,400 30,663 Pfizer 1,100,000 38,874 Quest Diagnostics 167,500 14,430 St. Jude Medical* 377,000 28,750 ---------- 171,828 ---------- SEMICONDUCTORS (3.4%) Analog Devices 325,000 15,974 Intel 810,700 23,145 Microchip Technology 392,800 12,456 ---------- 51,575 ---------- SERVICES (4.7%) Career Education* 288,300 19,596 Time Warner* 1,713,900 29,205 United Parcel Service, Cl B 300,000 21,516 ---------- 70,317 ---------- TECHNOLOGY (8.6%) Agilent Technologies* 540,200 13,883 CDW 184,900 12,991 Cisco Systems* 603,100 13,359 Dell* 373,800 13,150 EMC* 1,641,000 18,445 Kla-Tencor* 315,400 15,196 Lexmark International* 233,400 22,014 Tellabs* 2,455,300 19,495 ---------- 128,533 ---------- Total Common Stock (Cost $1,340,302) 1,477,725 ---------- 60 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- FACE AMOUNT (000)/SHARES VALUE (000) -------------------------------------------------------------------------------- REPURCHASE AGREEMENT (1.2%) Bear Stearns 1.020%, dated 05/28/04, to be repurchased on 06/01/04, repurchase price $18,607,544 (collateralized by FNMA obligations; total market value $18,982,512) (C) $18,606 $ 18,606 ---------- Total Repurchase Agreement (Cost $18,606) 18,606 ---------- CASH EQUIVALENT (0.2%) Boston Global Investment Trust -- Enhanced Portfolio (A) 2,240,250 2,240 ---------- Total Cash Equivalent (Cost $2,240) 2,240 ---------- Total Investments (100.2%) (Cost $1,361,148) 1,498,571 ---------- OTHER ASSETS AND LIABILITIES (-0.2%) Payable Upon Return of Securities Loaned (2,240) Investment Advisory Fees Payable (1,403) Distribution Fees Payable (151) Administration Fees Payable (86) Custodian Fees Payable (7) Transfer Agent Shareholder Servicing Fees Payable (7) Trustees' Fees Payable (1) Payable to Adviser (4) Receivable from Affiliated Funds 4 Other Assets and Liabilities, Net 315 ---------- Total Other Assets and Liabilities (3,580) ---------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 101,303,527 outstanding shares of beneficial interest $1,067,551 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 12,344,533 outstanding shares of beneficial interest 131,882 Paid in Capital -- L Shares (unlimited authorization -- no par value) based on 8,952,459 outstanding shares of beneficial interest 131,961 Accumulated net realized gain on investments 26,174 Net unrealized appreciation on investments 137,423 ---------- Total Net Assets (100.0%) $1,494,991 ========== Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($1,248,635,811 / 101,303,527 shares) $12.33 ========== Net Asset Value and Redemption Price Per Share -- A Shares ($145,883,233 / 12,344,533 shares) $11.82 ========== Maximum Offering Price Per Share -- A Shares ($11.82 / 96.25%) $12.28 ========== Net Asset Value and Offering Price Per Share -- L Shares (1) ($100,471,849 / 8,952,459 shares) $11.22 ========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 61 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 EMERGING GROWTH STOCK FUND -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK (96.6%) COMMUNICATION SERVICES (1.7%) Nextel Partners* 13,900 $ 227 ------- COMPUTER SOFTWARE (4.3%) Cognizant Technology Solutions* 12,000 555 ------- CONSUMER CYCLICALS (11.7%) Cache* 9,300 242 Coach* 5,400 236 Dick's Sporting Goods* 9,300 267 Marvel Enterprises* 8,300 169 Select Comfort* 5,700 154 Urban Outfitters* 8,200 450 ------- 1,518 ------- CONSUMER STAPLES (5.4%) Fred's 11,300 238 Whole Foods Market 5,400 464 ------- 702 ------- FINANCE (11.8%) Affiliated Managers Group* 10,100 492 Blackrock 6,700 423 Investors Financial Services 15,800 618 ------- 1,533 ------- HEALTH CARE (24.8%) Align Technology* 17,900 341 Biosite* 11,200 445 Cephalon* 6,300 339 Closure Medical* 10,100 252 Martek Biosciences* 7,000 448 Medicis Pharmaceutical 10,400 440 Neurocrine Biosciences* 3,200 183 Wilson Greatbatch Technologies* 12,300 335 Wright Medical Group* 13,400 435 ------- 3,218 ------- PRODUCER DURABLES (4.7%) Crown Castle International* 20,500 302 Lam Research* 4,800 120 MKS Instruments* 8,300 194 ------- 616 ------- SEMICONDUCTORS (3.2%) Amkor Technology* 12,100 124 Omnivision Technologies* 12,300 288 ------- 412 ------- -------------------------------------------------------------------------------- SHARES/FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- SERVICES (11.6%) aQuantive* 22,200 $ 223 CNET Networks* 35,200 340 Education Management* 7,600 263 Getty Images* 3,000 169 Netflix* 7,800 257 Sohu.com* 12,000 248 ------- 1,500 ------- TECHNOLOGY (15.9%) Akamai Technologies* 6,000 89 eCollege.com* 6,400 108 eResearch Technology* 21,000 531 F5 Networks* 5,000 149 Juniper Networks* 10,800 226 Utstarcom* 16,200 504 Viasat* 19,500 449 ------- 2,056 ------- TRANSPORTATION (1.5%) Airtran Holdings* 13,900 194 ------- Total Common Stock (Cost $12,570) 12,531 ------- REPURCHASE AGREEMENT (4.3%) Merrill Lynch 1.020%, dated 05/28/04, to be repurchased on 06/01/04, repurchase price $552,862 (collaterlaized by FNMA obligations; total market value $563,925) (C) $553 553 ------- Total Repurchase Agreement (Cost $553) 553 ------- Total Investments (100.9%) (Cost $13,123) 13,084 ------- OTHER ASSETS AND LIABILITIES (-0.9%) Investment Advisory Fees Payable (11) Payable to Affiliated Funds (7) Administration Fees Payable (1) Receivable from Adviser 6 Receivable from Administrator 3 Other Assets and Liabilities, Net (110) ------- Total Other Assets and Liabilities (120) ------- 62 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 1,342,951 outstanding shares of beneficial interest $13,110 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 4,068 outstanding shares of beneficial interest 40 Paid in Capital -- L Shares (unlimited authorization -- no par value) based on 3,618 outstanding shares of beneficial interest 37 Accumulated net investment loss (6) Accumulated net realized loss on investments (178) Net unrealized depreciation on investments (39) ------- Total Net Assets (100.0%) $12,964 ======= Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($12,890,768 / 1,342,951 shares) $9.60 ======= Net Asset Value and Redemption Price Per Share -- A Shares ($39,006 / 4,068 shares) $9.59 ======= Maximum Offering Price Per Share -- A Shares ($9.59 / 96.25%) $9.96 ======= Net Asset Value and Offering Price Per Share -- L Shares (1) ($34,651 / 3,618 shares) $9.58 ======= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 63 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 GROWTH AND INCOME FUND -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK (99.4%) BASIC MATERIALS (3.3%) E.I. du Pont de Nemours 250,000 $ 10,800 International Paper 200,000 8,386 Praxair 300,000 11,097 -------- 30,283 -------- CAPITAL GOODS (11.4%) Boeing 50,000 2,290 Cooper Industries Ltd., Cl A 200,000 11,380 Emerson Electric 175,000 10,447 General Electric 600,000 18,672 Honeywell International 400,000 13,480 Illinois Tool Works 125,000 11,235 Rockwell Automation 500,000 16,930 Textron 150,000 8,197 United Technologies 150,000 12,692 -------- 105,323 -------- COMMUNICATION SERVICES (4.0%) Alltel 150,000 7,594 Verizon Communications 550,000 19,019 Vodafone Group ADR* 450,000 10,692 -------- 37,305 -------- COMPUTER SOFTWARE (2.7%) Storage Technology* 450,000 12,712 Sungard Data Systems* 450,000 12,470 -------- 25,182 -------- CONSUMER CYCLICALS (10.9%) Gannett 125,000 10,975 Johnson Controls 150,000 8,088 Jones Apparel Group 325,964 12,540 Kohl's* 350,000 16,646 Lowe's 100,000 5,357 May Department Stores 450,000 12,897 Target 300,000 13,410 Wal-Mart Stores 175,000 9,753 Walt Disney 500,000 11,735 -------- 101,401 -------- CONSUMER STAPLES (8.0%) Clorox 275,000 14,399 Colgate-Palmolive 150,000 8,580 Gillette 100,000 4,309 HJ Heinz 175,000 6,535 Kimberly-Clark 150,000 9,885 PepsiCo 100,000 5,337 Sara Lee 500,000 11,450 Sysco 50,000 1,875 Wm. Wrigley Jr 185,000 11,618 -------- 73,988 -------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- ENERGY (9.4%) Anadarko Petroleum 250,000 $ 13,630 Burlington Resources 125,000 8,367 ChevronTexaco 150,000 13,560 ConocoPhillips 150,000 11,000 Exxon Mobil 450,000 19,463 Kerr-McGee 225,000 11,081 Schlumberger 175,000 10,005 -------- 87,106 -------- FINANCE (25.1%) American International Group 225,000 16,492 Bank of America 225,000 18,704 Berkshire Hathaway, Cl B* 6,700 19,912 Cincinnati Financial 315,000 13,466 Citigroup 425,000 19,733 Fannie Mae 126,100 8,537 Fifth Third Bancorp 175,000 9,501 Goldman Sachs Group 125,000 11,739 Jefferson-Pilot 75,000 3,850 MGIC Investment 125,000 9,125 Morgan Stanley 225,000 12,040 PNC Financial Services Group 275,000 15,183 Principal Financial Group* 500,000 17,475 Prudential Financial 475,000 21,042 US Bancorp 750,000 21,076 Wells Fargo 250,000 14,700 -------- 232,575 -------- HEALTH CARE (8.9%) Abbott Laboratories 200,000 8,242 Anthem* 112,000 9,915 Bristol-Myers Squibb 450,000 11,371 C.R. Bard 50,000 5,608 Express Scripts* 125,000 9,783 Hospira* 20,000 513 Johnson & Johnson 200,000 11,142 Medtronic 225,000 10,778 Merck 50,000 2,365 Pfizer 350,000 12,369 -------- 82,086 -------- SERVICES (1.5%) Cendant 600,000 13,764 -------- TECHNOLOGY (7.9%) Computer Sciences* (D) 125,000 5,449 First Data 300,000 12,987 Hewlett-Packard 450,000 9,558 Intel 175,000 4,996 International Business Machines 75,000 6,644 Microsoft 600,000 15,810 64 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- TECHNOLOGY -- CONTINUED Nokia ADR* 900,000 $ 12,366 Texas Instruments 200,000 5,222 -------- 73,032 -------- TRANSPORTATION (2.1%) Norfolk Southern 350,000 8,481 Ryder System 300,000 11,145 -------- 19,626 -------- UTILITIES (4.2%) American Electric Power 600,000 19,062 Exelon 350,000 11,655 Questar 225,000 8,245 -------- 38,962 -------- Total Common Stock (Cost $752,956) 920,633 -------- CASH EQUIVALENT (0.1%) Federated Prime Value Money Market Fund 1,076,732 1,077 Boston Global Investment Trust-- Enhanced Portfolio (A) 22,000 22 -------- Total Cash Equivalent (Cost $1,099) 1,099 -------- Total Investments (99.5%) (Cost $754,055) 921,732 -------- OTHER ASSETS AND LIABILITIES (0.5%) Payable Upon Return of Securities Loaned (22) Investment Advisory Fees Payable (697) Distribution Fees Payable (66) Administration Fees Payable (53) Custodian Fees Payable (4) Transfer Agent Shareholder Servicing Fees Payable (4) Trustees' Fees Payable (1) Receivable from Affiliated Funds 2 Other Assets and Liabilities, Net 5,485 -------- Total Other Assets and Liabilities 4,640 -------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 53,184,874 outstanding shares of beneficial interest $648,708 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 3,087,850 outstanding shares of beneficial interest 36,124 Paid in Capital -- L Shares (unlimited authorization -- no par value) based on 6,731,638 outstanding shares of beneficial interest 103,001 Undistributed net investment income 1,551 Accumulated net realized loss on investments (30,689) Net unrealized appreciation on investments 167,677 -------- Total Net Assets (100.0%) $926,372 ======== Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($782,665,241 / 53,184,874 shares) $14.72 ======== Net Asset Value and Redemption Price Per Share -- A Shares ($45,807,951 / 3,087,850 shares) $14.83 ======== Maximum Offering Price Per Share -- A Shares ($14.83 / 96.25%) $15.41 ======== Net Asset Value and Offering Price Per Share -- L Shares (1) ($97,898,905 / 6,731,638 shares) $14.54 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 65 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 INFORMATION AND TECHNOLOGY FUND -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK (93.4%) CAPITAL GOODS (6.7%) American Power Conversion 10,000 $ 181 Applied Materials* 11,000 220 Celestica* 15,000 282 Jabil Circuit* 10,000 283 Sanmina-SCI 9,000 95 TTM Technologies 7,000 80 ------- 1,141 ------- COMPUTER SOFTWARE (17.8%) Adobe Systems 6,000 268 Automatic Data Processing 7,000 311 BMC Software* 10,000 176 Cognos* 6,000 202 Microsoft 19,000 501 Network Associates* 8,000 133 Oracle* 10,000 113 Packeteer* 5,000 71 SAP ADR 12,000 485 Symantec* 7,000 321 Veritas Software* 17,000 452 ------- 3,033 ------- FINANCE (5.6%) AMBAC Financial Group 5,000 346 Lehman Brothers Holdings 4,800 363 Morgan Stanley 4,500 241 ------- 950 ------- HEALTH CARE (3.6%) Biogen Idec 10,000 621 ------- SEMICONDUCTORS (10.0%) Broadcom, Cl A* 5,000 211 Cypress Semiconductor* 6,500 106 Marvell Technology Group Ltd. 3,792 180 Micrel* 30,000 443 Microchip Technology* 17,000 539 Taiwan Semiconductor* Manufacturing ADR 10,000 102 Teradyne* 5,000 112 Triquint Semiconductor* 5,000 28 ------- 1,721 ------- SERVICES (22.5%) Accenture Ltd., Cl A* 10,000 246 Akamai Technologies* 10,000 149 Amazon.com* 14,000 676 eBay* 6,000 533 Getty Images* 7,000 394 Infospace* 9,000 329 Knight-Ridder 3,000 228 Time Warner* 20,000 341 -------------------------------------------------------------------------------- SHARES/FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- SERVICES -- CONTINUED VeriSign 15,000 $ 272 Yahoo!* 22,000 674 ------- 3,842 ------- TECHNOLOGY (27.2%) Alcatel ADR* 32,000 461 Apple Computer* 12,000 337 Avaya* 40,000 633 Cisco Systems* 28,000 620 Comverse Technology* 30,000 530 Enterasys Networks 14,000 27 Hewlett-Packard 11,000 234 International Business Machines 6,500 576 Juniper Networks* 19,400 406 Nortel Networks* (D) 30,000 115 Polycom 15,000 307 Qualcomm 1,500 101 STMicroelectronics 5,000 113 Utstarcom (D) 6,000 187 ------- 4,647 ------- Total Common Stock (Cost $13,880) 15,955 ------- REPURCHASE AGREEMENT (6.9%) Dresdner Bank 0.950%, dated 05/28/04, to be repurchased on 06/01/04, repurchase price $1,182,176 (collateralized by FNMA obligations; total market value $1,209,922) (C) $1,182 1,182 ------- Total Repurchase Agreement (Cost $1,182) 1,182 ------- CASH EQUIVALENT (1.4%) Boston Global Investment Trust -- Enhanced Portfolio (A) 239,400 239 ------- Total Cash Equivalent (Cost $239) 239 ------- Total Investments (101.7%) (Cost $15,301) 17,376 ------- OTHER ASSETS AND LIABILITIES (-1.7%) Payable Upon Return of Securities Loaned (239) Investment Advisory Fees Payable (15) Distribution Fees Payable (4) Administration Fees Payable (1) Other Assets and Liabilities, Net (26) ------- Total Other Assets and Liabilities (285) ------- 66 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 1,294,272 outstanding shares of beneficial interest $72,809 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 205 outstanding shares of beneficial interest 2 Paid in Capital -- L Shares (unlimited authorization -- no par value) based on 1,027,350 outstanding shares of beneficial interest 27,072 Accumulated net realized loss on investments (84,867) Net unrealized appreciation on investments 2,075 ------- Total Net Assets (100.0%) $17,091 ======= Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($9,712,279 / 1,294,272 shares) $7.50 ======= Net Asset Value and Redemption Price Per Share -- A Shares ($1,539.3 / 205.4 shares) $7.49 ======= Maximum Offering Price Per Share -- A Shares ($7.49 / 96.25%) $7.78 ======= Net Asset Value and Offering Price Per Share -- L Shares (1) ($7,377,522 / 1,027,350 shares) $7.18 ======= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 67 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 INTERNATIONAL EQUITY FUND -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- FOREIGN COMMON STOCK (97.3%) AUSTRALIA (4.5%) Australia & New Zealand Banking Group 74,547 $ 964 BlueScope Steel (D) 346,468 1,533 Boral (D) 321,359 1,344 Insurance Australia Group (D) 472,896 1,539 News Corp 56,947 522 Orica 139,279 1,456 Origin Energy (D) 287,361 1,083 Pacific Brands* 686,200 1,239 Publishing & Broadcasting (D) 199,050 1,753 Qantas Airways (D) 726,400 1,778 West Australian Newspapers Holdings (D) 164,090 774 Westpac Banking 128,082 1,572 -------- 15,557 -------- BELGIUM (0.8%) Delhaize Group (D) 33,502 1,594 Fortis (D) 63,638 1,351 -------- 2,945 -------- DENMARK (0.8%) Danske Bank 85,955 1,955 TDC 26,300 887 -------- 2,842 -------- FINLAND (1.5%) Fortum 120,000 1,411 Nokia* 201,446 2,745 Tietoenator 35,875 1,058 -------- 5,214 -------- FRANCE (9.5%) Alcatel* 107,709 1,548 Aventis* (D) 35,149 2,788 AXA 50,140 1,029 BNP Paribas 61,392 3,748 Cie de Saint-Gobain 28,252 1,423 France Telecom* 84,535 2,033 Lafarge (D) 25,464 2,198 Pernod-Ricard (D) 10,944 1,370 Peugeot (D) 28,791 1,625 Schneider Electric (D) 20,621 1,388 Societe Generale (D) 37,180 3,151 Suez (D) 63,656 1,237 Technip (D) 2,577 347 Thomson (D) 26,838 512 Total (D) 27,247 5,114 Vinci (D) 16,931 1,627 Vivendi Universal* 65,651 1,673 -------- 32,811 -------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- GERMANY (7.0%) Allianz 24,846 $ 2,591 BASF 42,842 2,190 Bayer (D) 25,014 713 Bayerische Motoren Werke 17,159 727 Deutsche Bank (D) 37,588 2,945 Deutsche Post 78,728 1,575 Deutsche Telekom* 131,987 2,215 E.ON 18,650 1,293 Infineon Technologies* 19,332 261 Metro* 23,228 1,125 Porsche 3,048 2,058 SAP 11,599 1,872 Schering 10,162 554 Siemens 54,510 3,837 Volkswagen 11,055 482 -------- 24,438 -------- HONG KONG (1.7%) Bank of East Asia 334,800 951 Cathay Pacific Airways 250,000 471 Cheung Kong Holdings 166,000 1,246 CLP Holdings 101,300 537 Esprit Holdings (D) 343,500 1,498 Hang Lung Properties 181,000 236 Hutchison Whampoa 117,700 797 -------- 5,736 -------- IRELAND (1.0%) Anglo Irish Bank 124,347 1,974 CRH 69,188 1,470 -------- 3,444 -------- ITALY (2.8%) Banca Intesa 351,093 1,260 ENI-Ente Nazionale Idrocarburi 142,173 2,898 Mediaset (D) 222,271 2,435 Saipem (D) 41,392 377 Telecom Italia (D) 575,550 1,764 UniCredito Italiano (D) 221,668 1,037 -------- 9,771 -------- JAPAN (22.6%) Advantest (D) 9,000 631 Amada 107,000 608 Asahi Breweries 146,600 1,544 Asahi Glass 166,000 1,753 Bank of Fukuoka 216,000 1,120 Bridgestone 40,000 668 Canon 40,100 1,977 Daimaru 39,000 342 68 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- JAPAN -- CONTINUED Daiwa Securities Group 190,000 $ 1,327 East Japan Railway 224 1,157 Eisai (D) 49,000 1,272 Fujitsu* 216,000 1,458 Hitachi 376,000 2,585 Honda Motor 25,900 1,115 Ito-Yokado 24,000 975 JFE Holdings 32,400 701 Kao 34,000 795 Kyocera 22,100 1,840 Kyushu Electric Power 90,900 1,563 Marubeni (D) 621,000 1,416 Matsushita Electric Industrial 74,000 1,022 Matsushita Electric Works 106,000 884 Millea Holdings 52 673 Mitsubishi 80,000 790 Mitsubishi Estate 28,000 345 Mitsubishi Tokyo Financial Group 296 2,544 Mitsui 80,000 609 Mitsui Fudosan 117,000 1,329 Mitsui OSK Lines 327,000 1,550 Mitsui Sumitomo Insurance 121,000 1,077 Mizuho Financial Group 389 1,675 Murata Manufacturing 10,100 582 Nippon Steel 387,000 784 Nippon Telegraph & Telephone 509 2,501 Nissan Motor 71,300 719 Nitto Denko 23,300 1,261 Nomura Holdings 88,000 1,349 Nomura Research Institute 10,100 1,023 NTT DoCoMo 528 994 Onward Kashiyama 66,000 1,065 ORIX 6,500 659 Pioneer 14,200 366 Ricoh 60,300 1,170 Rohm 9,000 1,075 Sammy Corp 19,100 731 Sankyo 40,600 812 Sankyo Gunma 24,200 821 Seven-Eleven Japan 27,000 853 Sharp 66,000 1,117 Shin-Etsu Chemical 31,900 1,117 Showa Shell Sekiyu KK 101,800 852 Sony 40,500 1,488 Sumitomo 200,000 1,544 Sumitomo Chemical 220,000 1,031 Sumitomo Mitsui Financial Group 234 1,677 Sumitomo Rubber Industries (D) 87,000 723 Takeda Chemical Industries 37,600 1,562 TDK 11,700 820 -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- JAPAN -- CONTINUED Tokyo Electric Power 71,900 $ 1,539 Tokyo Gas 255,000 897 Toppan Printing 137,000 1,667 Toyota Motor 134,700 4,875 West Japan Railway 191 741 Yamada Denki 18,200 608 Yamaha Motor 106,000 1,520 Yamato Transport 48,000 682 -------- 78,570 -------- NETHERLANDS (4.3%) ABN AMRO Holding 123,871 2,640 Akzo Nobel 46,880 1,695 ING Groep 103,545 2,337 Koninklijke Philips Electronics 123,419 3,353 Royal Dutch Petroleum 45,115 2,259 Royal KPN 238,415 1,729 Unilever (D) 10,497 690 United Services Group 16,389 228 -------- 14,931 -------- NEW ZEALAND (0.5%) Fletcher Building 643,223 1,786 -------- NORWAY (0.5%) Tandberg 30,600 308 Telenor 201,911 1,450 -------- 1,758 -------- SINGAPORE (0.8%) DBS Group Holdings 141,000 1,169 Fraser & Neave 60,130 478 SembCorp Industries 455,000 385 Singapore Airlines 34,000 210 Singapore Telecommunications 397,000 511 -------- 2,753 -------- SPAIN (4.5%) Acciona (D) 10,051 636 Altadis 28,974 887 Banco Santander Central Hispano 272,843 2,895 Endesa 112,117 2,069 Gamesa Corp Tecnologica* 17,867 801 Repsol 134,695 2,855 Sociedad General de Aguas de Barcelona* (D) 53,848 896 Sociedad General de Aguas de Barcelona (D) 481 8 Telefonica 267,223 3,877 Union Fenosa 30,920 660 -------- 15,584 -------- 69 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 INTERNATIONAL EQUITY FUND--CONCLUDED -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- SWEDEN (3.2%) Ainax* (B) (E) 2,239 $ 66 Autoliv (D) 31,197 1,283 Electrolux 48,800 972 Nordea 398,200 2,697 Sandvik 31,865 1,081 Svenska Handelsbanken 45,100 877 Telefonaktiebolaget LM Ericsson, Cl B* 1,071,948 2,991 Volvo (D) 34,700 1,124 -------- 11,091 -------- SWITZERLAND (6.8%) Credit Suisse Group* 92,845 3,186 Nestle 15,619 4,059 Novartis 153,679 6,885 Roche Holding 18,983 1,998 STMicroelectronics (D) 22,878 514 UBS 58,887 4,220 Zurich Financial Services* 18,090 2,845 -------- 23,707 -------- UNITED KINGDOM (24.5%) Alliance Unichem 154,340 1,791 Aviva 255,158 2,491 Balfour Beatty 345,444 1,582 Barclays 440,158 3,837 BHP Billiton 174,600 1,469 BP 1,032,520 9,044 British American Tobacco 148,690 2,181 BT Group 572,868 1,922 Burberry Group 216,052 1,543 Centrica 344,886 1,345 Dixons Group 574,274 1,603 Emap 131,343 1,833 Galen Holdings 78,530 1,043 GlaxoSmithKline 313,524 6,553 HBOS 322,619 4,223 HMV Group 247,000 1,067 HSBC Holdings 336,423 4,990 Kesa Electricals 274,006 1,429 Legal & General Group 901,100 1,471 mmO2* 840,358 1,502 Next 85,652 2,177 Northern Rock 139,742 1,855 Pennon Group 82,224 1,110 Pilkington 799,766 1,327 -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- UNITED KINGDOM -- CONTINUED Royal Bank of Scotland Group 121,328 $ 3,664 SABMiller 99,200 1,199 Sage Group 498,990 1,617 Shell Transport & Trading 488,994 3,534 Tesco 566,601 2,587 Vodafone Group 2,564,112 6,029 Whitbread 140,710 2,064 William Hill 228,421 2,266 Wimpey George 337,796 2,285 -------- 84,633 -------- Total Foreign Common Stock (Cost $293,433) 337,571 -------- EXCHANGE TRADED FUND (1.6%) iShares MSCI EAFE Index Fund (D) 39,997 5,534 -------- Total Exchange Traded Fund (Cost $5,397) 5,534 -------- CASH EQUIVALENT (15.0%) Boston Global Investment Trust -- Enhanced Portfolio (A) 52,076,710 52,077 -------- Total Cash Equivalent (Cost $52,077) 52,077 -------- Total Investments (113.9%) (Cost $350,907) 395,182 -------- OTHER ASSETS AND LIABILITIES (-13.9%) Payable Upon Return of Securities Loaned (52,077) Investment Advisory Fee Payable (358) Custodian Fees Payable (50) Administration Fees Payable (20) Distribution Fees Payable (5) Transfer Agent Shareholder Servicing Fees Payable (2) Receivable from Affiliated Funds 1 Other Assets and Liabilities, Net 4,171 -------- Total Other Assets and Liabilities (48,340) -------- 70 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 32,739,338 outstanding shares of beneficial interest $368,898 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 703,687 outstanding shares of beneficial interest 6,530 Paid in Capital -- L Shares (unlimited authorization -- no par value) based on 801,834 outstanding shares of beneficial interest 11,975 Undistributed net investment income 2,377 Accumulated net realized loss on investments (87,267) Net unrealized appreciation on investments 44,275 Net unrealized appreciation on foreign currency and translation of other assets and liabilities in foreign currency investments 54 -------- Total Net Assets (100.0%) $346,842 ======== Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($332,180,284 / 32,739,338 shares) $10.15 ======== Net Asset Value and Redemption Price Per Share -- A Shares ($7,055,667 / 703,687 shares) $10.03 ======== Maximum Offering Price Per Share -- A Shares ($10.03 / 96.25%) $10.42 ======== Net Asset Value and Offering Price Per Share -- L Shares (1) ($7,605,906 / 801,834 shares) $9.49 ======== -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- At May 31, 2004, sector diversification of the Fund was as follows (unaudited): % OF VALUE SECTOR DIVERSIFICATION NET ASSETS (000) ---------------------- -------------- ------------- FOREIGN COMMON STOCK Banking 15.7% $ 54,101 Energy 12.4 42,985 Finance 12.3 42,645 Telephones & Telecommunications 11.7 40,695 Building & Construction 6.8 23,733 Health Care 6.8 23,623 Technology 6.7 23,224 Automotive 4.0 14,113 Food, Beverage & Tobacco 3.3 11,371 Retail 2.9 10,018 Transportation 2.7 9,448 Apparel/Textiles 2.6 8,938 Wholesale 1.9 6,549 Chemicals 1.5 5,051 Services 1.4 4,698 Electronics 1.2 4,139 Household Products 1.2 4,123 Printing & Publishing 0.9 3,500 Photographic Equipment & Supplies 0.6 1,977 Metals & Mining 0.4 1,469 Office Furniture & Fixtures 0.3 1,171 ----- -------- TOTAL FOREIGN COMMON STOCK 97.3 337,571 EXCHANGE TRADED FUND 1.6 5,534 SHORT-TERM INVESTMENT 15.0 52,077 ----- -------- TOTAL INVESTMENTS 113.9 395,182 TOTAL OTHER ASSETS AND LIABILITIES, NET (13.9) (48,340) ----- -------- TOTAL NET ASSETS 100.0% $346,842 ===== ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 71 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 INTERNATIONAL EQUITY INDEX FUND -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- FOREIGN COMMON STOCK (95.5%) AUSTRALIA (2.5%) Alumina 39,656 $ 151 Amcor 26,805 125 Amp 49,137 195 Australia & New Zealand Banking Group 45,955 594 Australian Gas Light 19,509 164 BHP Billiton 99,299 854 BlueScope Steel 34,569 153 Brambles Industries (D) 34,805 146 Coca-Cola Amatil 20,682 105 Cochlear 2,438 36 Coles Myer 34,610 210 Commonwealth Bank of Australia 30,969 727 CSL 5,655 93 CSR 43,122 59 Foster's Group 69,625 226 General Property Trust 89,550 220 Insurance Australia Group 49,749 162 Lend Lease Corp 17,995 129 Macquarie Bank 8,055 192 Mayne Group 37,205 80 Mirvac Group 31,249 95 National Australia Bank 38,601 829 Newcrest Mining 7,159 65 News Corp 43,386 398 QBE Insurance Group (D) 26,224 234 Rinker Group 33,351 179 Rio Tinto 8,917 223 Santos 26,756 130 Southcorp 29,055 65 Stockland 41,098 155 Suncorp-Metway 22,088 218 TABCORP Holdings 16,790 160 Telstra 47,739 160 Wesfarmers 12,274 247 Westfield Holdings 20,837 217 Westfield Trust 96,972 295 Westpac Banking 44,551 547 WMC Resources 36,559 120 Woodside Petroleum 17,862 202 Woolworths 24,347 205 -------- 9,365 -------- AUSTRIA (2.1%) Bank Austria Creditanstalt (D) 13,957 794 Boehler-Uddeholm 3,106 237 Erste Bank der Oesterreichischen Sparkassen (D) 11,635 1,797 Flughafen Wien 6,213 345 -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- AUSTRIA -- CONTINUED Immofinanz Immobilien Anlagen (D) 44,811 $ 354 Mayr-Melnhof Karton (D) 1,584 190 OMV (D) 5,151 903 RHI* 9,336 194 Telekom Austria* 103,496 1,446 VA Technologie* 4,544 243 Verbund - Oesterreichische Elektrizitaetswirtschaf 1,854 308 Voestalpine (D) 9,256 413 Wienerberger (D) 19,972 676 Wienerberger Rights (D) 19,972 -- -------- 7,900 -------- BELGIUM (1.8%) AGFA-Gevaert (D) 10,980 267 Bekaert 1,895 109 Belgacom (D) 11,572 350 Colruyt 2,208 241 D'ieteren (D) 364 72 Delhaize Group 5,959 284 Dexia (D) 45,079 754 Electrabel (D) 2,151 701 Fortis (D) 76,787 1,632 Groupe Bruxelles Lambert 5,399 334 Interbrew 11,567 353 KBC Bancassurance Holding (D) 6,698 384 Omega Pharma 3,255 158 Solvay 5,076 408 UCB 7,912 368 Umicore 1,933 117 -------- 6,532 -------- DENMARK (1.1%) AP Moller - Maersk 89 579 Carlsberg 1,200 59 Danisco 4,359 207 Danske Bank 33,246 756 DSV 1,600 74 East Asiatic 1,050 47 FLS Industries* 3,200 43 GN Store Nord 21,500 161 Group 4 Falck 6,336 147 H Lundbeck (D) 5,500 122 ISS 3,878 185 NKT Holdings 1,300 25 Novo-Nordisk 17,970 826 Novozymes 5,570 244 TDC 9,200 310 Topdanmark* 2,200 133 Vestas Wind Systems* 8,438 112 William Demant Holding* 3,257 120 -------- 4,150 -------- 72 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- FINLAND (0.6%) Nokia 101,700 $ 1,386 Orion 3,300 84 Rautaruukki* 12,800 95 Stora Enso 15,406 200 Tietoenator 3,169 93 UPM-Kymmene* 11,700 210 Wartsila 1,200 25 -------- 2,093 -------- FRANCE (9.1%) Accor (D) 10,296 427 Air Liquide* (B) (E) 4,899 860 Alcatel* 58,957 847 Alstom* 54,005 62 Atos Origin* 2,132 125 Aventis* (D) 31,766 2,520 AXA 67,119 1,377 BNP Paribas 37,794 2,308 Bouygues (D) 9,868 340 Cap Gemini* 5,458 209 Carrefour 26,632 1,301 Casino Guichard Perrachon (D) 2,045 179 Cie de Saint-Gobain 14,306 721 Cie Generale D'Optique Essilor International (D) 6,230 386 Credit Agricole (D) 30,343 746 Dassault Systemes 2,943 134 European Aeronautic Defense and Space (D) 14,396 355 France Telecom* 56,606 1,361 Groupe Danone 5,803 1,001 L'Oreal 15,820 1,228 Lafarge* (B) (E) 997 86 Lafarge (D) 6,415 554 Lagardere S.C.A. (D) 6,749 412 LVMH Moet Hennessy Louis Vuitton (D) 11,662 833 Michelin (C.G.D.E.) (D) 7,093 346 Pernod-Ricard (D) 3,191 399 Peugeot (D) 9,444 533 Pinault-Printemps-Redoute 3,240 339 Publicis Groupe 5,452 161 Renault 8,204 611 Sanofi-Synthelabo (D) 17,872 1,181 Schneider Electric (D) 10,045 676 Societe BIC (D) 2,837 123 Societe Generale 15,084 1,278 Societe Television Francaise 1 (D) 6,871 213 Sodexho Alliance (D) 5,673 148 Suez (D) 38,495 748 Technip (D) 1,506 203 -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- FRANCE -- CONTINUED Thales (D) 4,539 $ 160 Thomson (D) 11,812 225 Total (D) 30,350 5,696 Unibail 3,491 347 Valeo (D) 4,076 165 Veolia Environnement (D) 12,058 322 Vinci (D) 3,579 344 Vivendi Universal* 43,296 1,103 -------- 33,693 -------- GERMANY (13.9%) Adidas-Salomon* 5,115 603 Allianz 30,236 3,153 Altana 7,722 501 BASF (D) 57,169 2,922 Bayer (D) 67,938 1,937 Bayerische Hypo-und Vereinsbank* 53,557 905 Beiersdorf 2,855 321 Celesio 4,032 230 Commerzbank 52,500 861 Continental 14,509 651 DaimlerChrysler 89,932 4,010 Deutsche Bank (D) 54,864 4,299 Deutsche Boerse (D) 11,216 598 Deutsche Lufthansa 21,871 312 Deutsche Post 46,723 935 Deutsche Telekom* 263,227 4,417 Douglas Holding 6,189 164 E.ON 65,063 4,509 Epcos* 6,198 125 Fresenius Medical Care (D) 4,037 298 HeidelbergCement 4,273 188 Hypo Real Estate Holding* 13,568 381 Infineon Technologies* 66,754 902 KarstadtQuelle (D) 5,639 115 Linde 9,191 474 MAN 12,486 462 Merck 6,208 349 Metro* 15,524 751 MLP 6,775 105 Muenchener Rueckversicherungs (D) 15,682 1,609 Puma Rudolf Dassler Sport 1,715 419 RWE* 43,568 1,899 SAP 21,481 3,468 Schering 18,067 985 Siemens 83,733 5,894 Suedzucker 5,999 119 ThyssenKrupp 32,659 544 TUI (D) 15,725 305 Volkswagen (D) 23,712 1,034 -------- 51,754 -------- 73 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 INTERNATIONAL EQUITY INDEX FUND--CONTINUED -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- GREECE (1.3%) Alpha Bank A.E 24,960 $ 653 Coca Cola Hellenic Bottling 10,600 265 Commercial Bank of Greece 8,200 217 Cosmote Mobile Communications 9,400 157 EFG Eurobank Ergasias 22,900 510 Hellenic Duty Free Shops 4,700 86 Hellenic Petroleum 17,200 132 Hellenic Technodomiki 4,300 22 Hellenic Telecommunications Organization 30,400 400 Intracom 28,700 144 National Bank of Greece 25,030 754 OPAP 21,300 409 Piraeus Bank 23,000 268 Public Power 11,000 275 Technical Olympic 18,600 87 Titan Cement 4,000 175 Viohalco 16,600 105 Vodafone-Panafon 23,800 160 -------- 4,819 -------- HONG KONG (1.1%) Bank of East Asia 84,800 241 BOC Hong Kong Holdings 134,000 232 Cheung Kong Holdings 67,000 503 CLP Holdings 73,100 387 Hang Seng Bank 27,600 350 Henderson Land Development 38,000 164 Hong Kong & China Gas 160,237 253 HongKong Electric Holdings 52,500 220 Hutchison Whampoa 79,080 535 Johnson Electric Holdings 69,500 65 Li & Fung 80,000 119 PCCW* 124,326 84 Sun Hung Kai Properties 55,600 473 Swire Pacific 46,000 297 Wharf Holdings 66,000 186 -------- 4,109 -------- IRELAND (0.9%) Allied Irish Banks 62,363 889 Bank of Ireland 45,411 538 CRH 42,011 890 Elan* 18,934 447 Greencore Group 1,849 7 Irish Life & Permanent 14,393 219 Kerry Group 8,738 180 Ryanair Holdings* 14,383 76 -------- 3,246 -------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- ITALY (7.5%) Alleanza Assicurazioni (D) 45,753 $ 501 Arnoldo Mondadori Editore (D) 18,346 175 Assicurazioni Generali (D) 90,120 2,337 Autogrill* 15,772 224 Autostrade 17,905 344 Banca Antonveneta* 22,036 440 Banca Fideuram 30,040 172 Banca Intesa 354,427 1,272 Banca Intesa RNC 84,849 232 Banca Monte dei Paschi di Siena (D) 101,096 314 Banca Nazionale del Lavoro* 152,063 318 Banca Popolare di Milano* (D) 47,661 281 Banche Popolari Unite (D) 26,509 426 Banco Popolare di Verona e Novara SCRL (D) 39,116 642 Benetton Group* (D) 8,447 96 Bulgari* (D) 18,101 175 Capitalia (D) 116,135 342 Enel 228,930 1,876 ENI-Ente Nazionale Idrocarburi 247,680 5,048 Fiat* 35,855 254 FinecoGroup* (D) 15,426 91 Finmeccanica* (D) 605,647 457 Italcementi (D) 11,705 147 Luxottica Group (D) 13,231 214 Mediaset (D) 60,812 666 Mediobanca 46,681 535 Mediolanum (D) 25,766 173 Parmalat Finanziaria (D) 46,288 6 Pirelli (D) 154,481 158 Rinascente* (B) 15,295 -- Riunione Adriatica di Sicurta (D) 30,291 543 Sanpaolo IMI (D) 94,032 1,076 Seat Pagine Gialle* 366,379 146 Snam Rete Gas (D) 91,702 386 Telecom Italia (D) 760,083 2,330 Telecom Italia RNC (D) 627,472 1,360 Telecom Italia Media* (D) 138,972 59 TIM (D) 360,135 1,953 Tiscali* 19,365 85 UniCredito Italiano (D) 395,847 1,851 -------- 27,705 -------- JAPAN (30.2%) 77 Bank 29,000 171 Acom 5,190 347 Advantest (D) 4,700 330 Aeon 15,700 658 Aiful 3,100 303 Ajinomoto 35,000 402 Alps Electric 12,000 151 74 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- JAPAN -- CONTINUED Amada 21,000 $ 119 Ariake Japan 1,340 36 Asahi Breweries 27,000 284 Asahi Glass 49,000 517 Asahi Kasei 85,000 418 Bank of Fukuoka (D) 45,000 233 Bank of Yokohama 68,000 388 Benesse (D) 5,900 179 Bridgestone 43,000 718 Canon 56,000 2,761 Casio Computer 22,000 293 Central Japan Railway 53 427 Chiba Bank 47,000 271 Chubu Electric Power (D) 41,200 859 Chugai Pharmaceutical 20,000 303 Citizen Watch 24,000 251 COMSYS Holdings 13,000 96 Credit Saison (D) 10,000 285 CSK 5,400 209 Dai Nippon Printing 43,000 657 Daiichi Pharmaceutical (D) 16,600 274 Daikin Industries 13,000 308 Dainippon Ink and Chemicals 68,000 154 Daito Trust Construction 7,100 255 Daiwa House Industry 31,000 350 Daiwa Securities Group 85,000 594 Denki Kagaku Kogyo 44,000 139 Denso 30,500 654 East Japan Railway 221 1,142 Ebara (D) 25,000 112 Eisai (D) 16,300 423 Fanuc 9,700 566 Fast Retailing 3,900 279 Fuji Electric Holdings 40,000 98 Fuji Photo Film 31,000 906 Fuji Television Network 60 137 Fujikura 27,000 129 Fujisawa Pharmaceutical 18,000 398 Fujitsu* 107,000 722 Furukawa Electric* (D) 42,000 156 Gunma Bank 26,000 120 Hirose Electric 2,500 273 Hitachi 197,000 1,355 Hitachi Cable 9,000 40 Honda Motor 52,400 2,257 Hoya 7,500 774 Isetan 15,500 209 Ishihara Sangyo Kaisha 29,000 57 Ishikawajima-Harima Heavy Industries* 86,000 123 Ito-Yokado 24,000 975 Itochu* 99,000 406 -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- JAPAN -- CONTINUED Itochu Techno-Science 2,800 $ 109 Japan Airlines System* 52,000 151 Japan Tobacco 50 403 JFE Holdings 30,575 661 JGC 17,000 143 Joyo Bank 55,300 218 JSR 15,000 319 Kajima (D) 60,000 196 Kamigumi 24,000 158 Kaneka 22,000 203 Kansai Electric Power 43,300 758 Kao 34,000 795 Katokichi 4,800 85 Kawasaki Heavy Industries (D) 115,000 172 Kawasaki Kisen Kaisha 29,000 134 Keihin Electric Express Railway (D) 42,000 250 Keio Electric Railway 42,000 222 Keyence 2,200 509 Kikkoman (D) 17,000 137 Kinden 16,000 81 Kintetsu 92,250 339 Kirin Brewery 46,000 438 Kokuyo 8,900 108 Komatsu 68,000 409 Konami 6,900 154 Konica Minolta Holdings 27,500 372 Kubota 71,000 329 Kuraray 29,000 218 Kurita Water Industries 10,600 135 Kyocera 11,300 941 Kyowa Hakko Kogyo 26,000 170 Kyushu Electric Power 27,800 478 Lawson 4,800 176 Mabuchi Motor 2,300 154 Makita (D) 13,000 182 Marubeni 129,000 294 Marui 23,400 311 Matsumotokiyoshi 2,700 74 Matsushita Electric Industrial 140,880 1,945 Matsushita Electric Works 27,000 225 Meiji Seika Kaisha (D) 32,000 130 Meitec 3,900 137 Millea Holdings 100 1,294 Minebea 27,000 118 Mitsubishi 67,000 661 Mitsubishi Chemical 114,000 269 Mitsubishi Electric 116,000 572 Mitsubishi Estate 65,000 800 Mitsubishi Gas Chemical 27,000 101 Mitsubishi Heavy Industries 190,000 497 Mitsubishi Logistics 12,000 104 75 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 INTERNATIONAL EQUITY INDEX FUND--CONTINUED -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- JAPAN -- CONTINUED Mitsubishi Materials 67,000 $ 128 Mitsubishi Rayon 47,000 164 Mitsubishi Tokyo Financial Group 281 2,415 Mitsui 79,000 602 Mitsui Chemicals 44,000 213 Mitsui Engineering & Shipping 48,000 81 Mitsui Fudosan* 48,000 545 Mitsui Mining & Smelting 43,000 170 Mitsui OSK Lines 71,000 337 Mitsui Sumitomo Insurance 85,340 760 Mitsui Trust Holdings 41,000 273 Mitsukoshi (D) 37,000 180 Mizuho Financial Group 435 1,873 Murata Manufacturing (D) 15,500 893 NEC 110,000 805 NGK Insulators 21,000 149 NGK Spark Plug 14,000 126 Nichii Gakkan 1,400 65 Nidec (D) 2,700 296 Nikko Cordial 92,000 482 Nikon (D) 20,000 215 Nintendo 6,700 672 Nippon Express 60,000 324 Nippon Meat Packers 13,000 141 Nippon Mining Holdings 47,000 217 Nippon Oil 90,000 511 Nippon Sheet Glass 31,000 103 Nippon Steel 344,000 697 Nippon Telegraph & Telephone 354 1,739 Nippon Unipac Holding 57 278 Nippon Yusen Kabushiki Kaisha 72,000 308 Nissan Chemical Industries 11,000 79 Nissan Motor 167,700 1,692 Nisshin Seifun Group 17,000 156 Nissin Food Products 6,700 163 Nitto Denko 10,600 574 Nomura Holdings 120,000 1,839 NSK 37,000 167 NTN 28,000 130 NTT Data 88 259 NTT DoCoMo 1,175 2,211 Obayashi 47,000 225 OJI Paper 51,000 324 Olympus 16,000 288 Omron 17,000 373 Onward Kashiyama 13,000 210 Oracle Corp Japan (D) 2,600 127 Oriental Land 3,800 233 ORIX 5,620 570 Osaka Gas 136,000 364 Pioneer 12,000 309 -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- JAPAN -- CONTINUED Promise 6,450 $ 424 Resona Holdings* (D) 314,000 543 Ricoh 43,000 835 Rohm 7,300 872 Sankyo 24,200 484 Sankyo Gunma 3,900 132 Sanyo Electric 101,000 395 Sapporo Holdings (D) 30,000 97 Secom 15,000 604 Sega* 8,700 88 Seiko Epson 4,200 144 Sekisui Chemical 39,000 287 Sekisui House 32,000 333 Seven-Eleven Japan 28,000 884 Sharp 65,000 1,100 Shimamuras 1,600 127 Shimano 8,400 198 Shimizu (D) 42,000 176 Shin-Etsu Chemical 23,800 833 Shionogi 21,000 342 Shiseido (D) 25,000 296 Shizuoka Bank 38,000 310 Showa Denko 84,000 180 Showa Shell Sekiyu 13,700 115 Skylark (D) 7,700 147 SMC 3,500 374 Snow Brand Milk Products* (D) 8,500 28 Softbank (D) 15,600 597 Sompo Japan Insurance 51,000 445 Sony 59,600 2,189 Stanley Electric 13,000 214 Sumitomo 52,000 401 Sumitomo Chemical 80,000 375 Sumitomo Electric Industries 39,000 375 Sumitomo Metal Industries 256,000 287 Sumitomo Metal Mining 37,000 220 Sumitomo Mitsui Financial Group 254 1,820 Sumitomo Realty & Development (D) 29,000 313 Sumitomo Trust & Banking 66,000 407 T&D Holdings* 10,400 436 Taiheiyo Cement 59,000 129 Taisei 63,000 210 Taisho Pharmaceutical 12,000 244 Taiyo Yuden 10,000 144 Takara Holdings (D) 17,000 129 Takashimaya (D) 25,000 275 Takeda Chemical Industries 56,100 2,330 Takefuji (D) 4,810 321 TDK 7,900 554 Teijin 60,000 194 76 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- JAPAN -- CONTINUED Teikoku Oil (D) 23,000 $ 118 Terumo 12,500 294 THK (D) 8,400 149 Tobu Railway 70,000 297 Toho 15,400 221 Tohoku Electric Power 29,100 469 Tokyo Broadcasting System 4,200 75 Tokyo Electric Power 75,900 1,624 Tokyo Electron 10,500 598 Tokyo Gas 169,000 595 Tokyu 74,000 365 TonenGeneral Sekiyu 23,000 195 Toppan Printing 40,000 487 Toray Industries 89,000 409 Toshiba 185,000 795 Tosoh 46,000 159 Tostem Inax Holding 16,512 338 Toto 25,700 276 Toyo Seikan Kaisha (D) 12,300 202 Toyobo 64,000 151 Toyota Industries 10,000 218 Toyota Motor 182,500 6,604 Trend Micro (D) 7,000 263 Ube Industries* 73,000 108 UFJ Holdings* 241 1,208 Uni-Charm 3,500 170 UNY 13,000 161 Wacoal 12,000 127 West Japan Railway 113 439 World 3,750 117 Yakult Honsha (D) 9,000 124 Yamada Denki 6,700 224 Yamaha 12,900 195 Yamaha Motor 13,000 186 Yamaichi Securities* (B) 15,000 -- Yamanouchi Pharmaceutical 21,700 697 Yamato Transport 27,000 384 Yamazaki Baking 14,000 130 Yokogawa Electric 21,000 272 -------- 112,346 -------- LUXEMBOURG (0.1%) Arcelor 16,122 270 -------- NETHERLANDS (2.7%) ABN AMRO Holding 41,598 886 Aegon 38,670 467 Akzo Nobel 7,733 280 ASML Holding* 13,151 229 Heineken 7,000 231 ING Groep 47,363 1,069 Koninklijke Ahold 29,673 233 Koninklijke Philips Electronics 35,726 971 -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- NETHERLANDS -- CONTINUED Qiagen* 16,294 $ 180 Reed Elsevier 21,098 294 Royal Dutch Petroleum 54,342 2,721 Royal KPN 56,013 406 Royal Numico* 3,938 125 TPG 10,822 243 Unilever (D) 16,615 1,093 Vedior 3,325 50 VNU 7,812 230 Wolters Kluwer 10,646 180 -------- 9,888 -------- NEW ZEALAND (0.4%) Auckland International Airport 37,428 158 Carter Holt Harvey 82,300 101 Contact Energy 38,226 136 Fisher & Paykel Healthcare 11,033 88 Fletcher Building 54,884 152 Sky City Entertainment Group 65,152 194 Telecom Corp of New Zealand 162,728 569 Warehouse Group 18,390 50 -------- 1,448 -------- NORWAY (1.5%) DNB NOR (D) 116,940 742 Frontline 5,750 202 Norsk Hydro 21,140 1,312 Norske Skogindustrier (D) 15,750 262 Orkla (D) 33,350 845 Schibsted (D) 6,500 114 Statoil (D) 60,000 756 Storebrand (D) 26,400 177 Tandberg 20,894 210 Telenor 94,400 678 Tomra Systems (D) 27,150 109 Yara International* 21,140 157 -------- 5,564 -------- PORTUGAL (0.9%) Banco BPI* 69,684 254 Banco Comercial Portugues* 204,959 476 Banco Espirito Santo* 14,323 236 Brisa-Auto Estradas de Portugal 47,087 327 Cimpor Cimentos de Portugal 27,659 145 Electricidade de Portugal 218,837 593 Portugal Telecom SGPS* 103,899 1,065 PT Multimedia Servicos* 5,602 118 Sonae SGPS 193,715 201 -------- 3,415 -------- 77 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 INTERNATIONAL EQUITY INDEX FUND--CONTINUED -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- SINGAPORE (0.6%) City Developments 28,000 $ 86 DBS Group Holdings 41,467 344 Haw Par 24,000 66 Keppel 24,000 94 Oversea-Chinese Banking 39,350 278 SembCorp Industries 92,000 78 Singapore Airlines 31,000 191 Singapore Press Holdings 23,000 277 Singapore Telecommunications 228,000 294 United Overseas Bank 47,000 359 -------- 2,067 -------- SPAIN (4.1%) Abertis Infraestructuras (D) 13,971 236 Acerinox 4,030 221 ACS Actividades Construccion y Servicios* 8,313 406 Altadis 18,023 552 Antena 3 Television* 1,640 83 Banco Bilbao Vizcaya Argentaria 182,974 2,422 Banco Popular Espanol 9,251 520 Banco Santander Central Hispano 244,384 2,593 Endesa 53,893 994 Fomento de Construcciones y Contratas 4,531 163 Gas Natural 12,856 307 Iberdrola 44,882 905 Inditex 12,752 293 Repsol 55,392 1,174 Sacyr Vallehermoso 9,342 138 Sociedad General de Aguas de Barcelona 6,175 103 Telefonica 271,014 3,932 Union Fenosa 13,060 279 Zeltia 11,877 87 -------- 15,408 -------- SWEDEN (1.7%) Ainax* (B) (E) 623 18 Assa Abloy 12,000 139 Atlas Copco 5,600 207 Electrolux (D) 13,500 269 Gambro 11,600 105 Hennes & Mauritz 18,500 458 Nordea 87,000 589 Sandvik 9,400 319 Securitas* 13,400 165 Skandia Forsakrings 40,900 164 Skandinaviska Enskilda Banken 21,400 309 Skanska 19,600 164 SKF 4,700 171 Svenska Cellulosa 6,700 259 -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- SWEDEN -- CONTINUED Svenska Handelsbanken 19,800 $ 385 Swedish Match* 15,100 160 Tele2 4,950 213 Telefonaktiebolaget LM Ericsson* 548,800 1,531 TeliaSonera 64,000 270 Volvo (D) 9,650 313 WM-Data 18,000 40 -------- 6,248 -------- SWITZERLAND (1.8%) ABB* 21,849 122 Adecco* 2,073 100 Compagnie Financiere Richemont 7,410 191 Credit Suisse Group* 14,245 489 Geberit 139 89 Holcim (D) 2,050 107 Nestle 4,676 1,215 Novartis 26,557 1,190 Roche Holding 8,329 893 STMicroelectronics (D) 28,624 643 Swiss Reinsurance 4,012 249 Swisscom (D) 375 117 Syngenta* 2,152 171 UBS 13,909 997 Zurich Financial Services* 1,835 288 -------- 6,861 -------- UNITED KINGDOM (9.6%) 3i Group 15,165 170 Amvescap 15,873 106 ARM Holdings 33,243 72 AstraZeneca 31,408 1,463 Aviva 44,403 434 BAA 24,465 244 BAE Systems 61,392 232 Barclays 118,843 1,036 BG Group 72,549 442 BHP Billiton 48,542 409 BOC Group 12,833 209 Boots Group 19,447 235 BP 397,767 3,484 Brambles Industries 23,351 91 British American Tobacco 33,426 490 British Land 15,639 192 British Sky Broadcasting 25,359 285 BT Group 157,951 530 Cable & Wireless* 61,050 138 Cadbury Schweppes 37,819 322 Canary Wharf Group* 15,185 82 Capita Group 20,590 117 Carnival 4,408 198 78 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- UNITED KINGDOM -- CONTINUED Celltech Group* 8,578 $ 86 Centrica 84,326 329 Compass Group 50,303 314 Corus Group* 78,145 48 Davis Service Group 14,536 98 De La Rue 8,104 48 Diageo 57,434 762 Dixons Group 44,529 124 Electrocomponents 14,159 92 EMI Group 25,656 103 Exel 9,691 125 GKN 23,726 100 GlaxoSmithKline 109,071 2,280 GUS 21,884 326 Hanson 17,664 135 Hays 50,670 115 HBOS 71,559 937 Hilton Group 47,861 233 HSBC Holdings 196,921 2,921 Imperial Chemical Industries 28,556 115 Imperial Tobacco Group 18,336 408 Intercontinental Hotels Group 20,714 199 International Power* 32,977 88 Invensys* 113,861 34 ITV 81,457 177 J Sainsbury 31,693 158 Johnson Matthey 6,178 100 Kingfisher 47,713 250 Land Securities Group 13,594 292 Legal & General Group 148,309 242 Lloyds TSB Group 111,273 879 LogicaCMG 18,962 65 Man Group 7,059 212 Marks & Spencer Group 45,537 300 Mitchells & Butlers 16,865 80 National Grid Transco 57,305 454 Next 5,768 147 Pearson 19,169 234 Peninsular and Oriental Steam Navigation 22,261 87 Provident Financial 8,271 97 Prudential 40,595 334 Reckitt Benckiser 12,173 330 Reed Elsevier 28,391 274 Rentokil Initial 44,742 120 Reuters Group 30,832 206 Rio Tinto 19,871 479 Royal & Sun Alliance Insurance Group 75,833 113 Royal Bank of Scotland Group 51,540 1,556 -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- UNITED KINGDOM -- CONTINUED Sage Group 39,582 $ 128 Scottish & Newcastle 19,193 150 Scottish & Southern Energy 19,847 252 Scottish Power 40,884 297 Severn Trent 8,781 130 Shell Transport & Trading 170,524 1,233 Smith & Nephew 23,240 244 Smiths Group 15,319 196 Stagecoach Group 26,997 41 Tesco 142,208 649 Unilever 66,595 633 United Utilities 17,847 178 United Utilities, Cl A 9,915 62 Vodafone Group 1,266,880 2,979 Wolseley 15,140 228 WPP Group 23,967 239 -------- 35,826 -------- Total Foreign Common Stock (Cost $317,324) 354,707 -------- EXCHANGE TRADED FUNDS (1.8%) iShares MSCI EAFE Index Fund (D) 25,715 3,558 iShares MSCI Germany Index Fund 67,773 1,054 iShares MSCI Italy Index Fund 27,534 556 iShares MSCI Japan Index Fund 159,560 1,594 -------- Total Exchange Traded Funds (Cost $6,498) 6,762 -------- FOREIGN PREFERRED STOCK (0.7%) AUSTRALIA (0.2%) News Corp 72,001 609 -------- GERMANY (0.5%) Fresenius Medical Care 2,658 143 Henkel KGaA (D) 6,278 524 Porsche 929 627 ProSieben SAT.1 Media 12,064 191 Volkswagen 11,680 341 -------- 1,826 -------- Total Foreign Preferred Stock (Cost $2,095) 2,435 -------- COMMON STOCK (0.1%) General Electric 8,355 259 -------- Total Common Stock (Cost $161) 259 -------- 79 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 INTERNATIONAL EQUITY INDEX FUND--CONCLUDED -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- WARRANTS (0.0%) SINGAPORE (0.0%) City Developments, Expires 05/10/06* (Cost $0) 2,800 $ 4 -------- Total Warrants 4 -------- CASH EQUIVALENT (19.2%) Boston Global Investment Trust -- Enhanced Portfolio (A) 71,374,411 71,374 -------- Total Cash Equivalent (Cost $71,374) 71,374 -------- Total Investments (117.3%) (Cost $397,452) 435,541 -------- OTHER ASSETS AND LIABILITIES (-17.3%) Payable Upon Return of Securities Loaned (71,374) Investment Advisory Fees Payable (249) Custodian Fees Payable (60) Administration Fees Payable (21) Distribution Fees Payable (8) Transfer Agent Shareholder Servicing Fees Payable (2) Payable to Adviser (1) Receivable from Affiliated Funds 1 Other Assets and Liabilities, Net 7,581 -------- Total Other Assets and Liabilities (64,133) -------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 31,608,699 outstanding shares of beneficial interest 387,145 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 1,375,712 outstanding shares of beneficial interest 9,433 Paid in Capital -- L Shares (unlimited authorization -- no par value) based on 487,306 outstanding shares of beneficial interest 6,429 Undistributed net investment income 3,035 Accumulated net realized loss on investments (72,810) Net unrealized appreciation on investments 38,089 Net unrealized appreciation on foreign currency and translation of other assets and liabilities in foreign currency investments 87 -------- Total Net Assets (100.0%) $371,408 ======== -------------------------------------------------------------------------------- VALUE -------------------------------------------------------------------------------- Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($351,162,742 / 31,608,699 shares) $11.11 ======== Net Asset Value and Redemption Price Per Share -- A Shares ($15,037,096 / 1,375,712 shares) $10.93 ======== Maximum Offering Price Per Share -- A Shares ($10.93 / 96.25%) $11.36 ======== Net Asset Value and Offering Price Per Share -- L Shares (1) ($5,208,181 / 487,306 shares) $10.69 ======== At May 31, 2004, sector diversification of the Fund was as follows (unaudited): % OF VALUE SECTOR DIVERSIFICATION NET ASSETS (000) ---------------------- -------------- ------------- FOREIGN COMMON STOCK Banking 17.7% $ 65,982 Telephones & Telecommunications 10.9 40,497 Finance 10.5 39,141 Energy 7.7 28,434 Automotive 5.4 19,985 Technology 5.0 18,755 Health Care 5.0 18,690 Electrical Services 4.7 17,430 Chemicals 3.8 14,010 Food, Beverage & Tobacco 3.4 12,640 Services 2.7 9,865 Retail 2.5 9,150 Transportation 2.5 9,147 Machinery 2.4 8,954 Real Estate Investment Trusts 1.9 7,089 Building & Construction 1.4 5,262 Photographic Equipment & Supplies 1.1 4,254 Printing & Publishing 1.0 3,701 Wholesale 1.0 3,627 Metals 1.0 3,533 Apparel/Textiles 0.8 2,921 Utilities 0.8 2,803 Miscellaneous Manufacturing 0.6 2,268 Paper & Packaging 0.5 2,012 Aerospace & Defense 0.5 1,765 Entertainment 0.4 1,474 Office Furniture & Fixtures 0.3 1,066 Lumber & Wood Products -- 151 Containers -- 101 ----- -------- TOTAL FOREIGN COMMON STOCK 95.5 354,707 SHORT-TERM INVESTMENT 19.2 71,374 EXCHANGE TRADED FUNDS 1.8 6,762 FOREIGN PREFERRED STOCK 0.7 2,435 COMMON STOCK 0.1 259 WARRANTS 0.0 4 ----- -------- TOTAL INVESTMENTS 117.3 435,541 TOTAL OTHER ASSETS AND LIABILITIES, NET (17.3) (64,133) ----- -------- TOTAL NET ASSETS 100.0% $371,408 ===== ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 80 -------------------------------------------------------------------------------- LIFE VISION AGGRESSIVE GROWTH FUND+ -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- EQUITY FUNDS (96.0%) STI Classic Capital Appreciation Fund, T Shares 1,163,723 $14,349 STI Classic Growth and Income Fund, T Shares 592,154 8,717 STI Classic International Equity Index Fund, T Shares 680,094 7,556 STI Classic Mid-Cap Equity Fund, T Shares 212,168 2,189 STI Classic Small Cap Growth Stock Fund, T Shares 109,059 2,208 STI Classic Small Cap Value Equity Fund, T Shares 120,575 2,202 STI Classic Value Income Stock Fund, T Shares 415,203 4,762 ------- Total Equity Funds (Cost $37,790) 41,983 ------- MONEY MARKET FUND (3.9%) STI Classic Prime Quality Money Market Fund, T Shares 1,693,084 1,693 ------- Total Money Market Fund (Cost $1,693) 1,693 ------- Total Investments (99.9%) (Cost $39,483) 43,676 ------- OTHER ASSETS AND LIABILITIES (0.1%) Investment Advisory Fees Payable (4) Administration Fees Payable (3) Other Assets and Liabilities, Net 33 ------- Total Other Assets and Liabilities 26 ------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 3,753,944 outstanding shares of beneficial interest $37,291 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 84,711 outstanding shares of beneficial interest 858 Paid in Capital -- B Shares (unlimited authorization -- no par value) based on 429,033 outstanding shares of beneficial interest 3,833 Accumulated net realized loss on investments (2,473) Net unrealized appreciation on investments 4,193 ------- Total Net Assets (100.0%) $43,702 ======= Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($38,468,014 / 3,753,944 shares) $10.25 ======= Net Asset Value and Redemption Price Per Share -- A Shares ($866,707 / 84,711 shares) $10.23 ======= Maximum Offering Price Per Share -- A Shares ($10.23 / 96.25%) $10.63 ======= Net Asset Value and Offering Price Per Share -- B Shares (1) ($4,367,655 / 429,033 shares) $10.18 ======= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 81 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 LIFE VISION CONSERVATIVE FUND+ -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- FIXED INCOME FUNDS (71.3%) STI Classic High Income Fund, T Shares 37,183 $ 274 STI Classic Institutional Total Return Bond Fund, T Shares 55,857 548 STI Classic Limited-Term Federal Mortgage Securities Fund, T Shares 268,242 2,731 STI Classic U.S. Government Securities Fund, T Shares 37,003 383 ------ Total Fixed Income Funds (Cost $4,027) 3,936 ------ EQUITY FUNDS (25.8%) STI Classic Capital Appreciation Fund, T Shares 22,825 281 STI Classic Growth and Income Fund, T Shares 19,166 282 STI Classic International Equity Index Fund, T Shares 25,895 288 STI Classic Mid-Cap Equity Fund, T Shares 10,986 113 STI Classic Small Cap Growth Stock Fund, T Shares 11,295 229 STI Classic Small Cap Value Equity Fund, T Shares 12,487 228 ------ Total Equity Funds (Cost $1,217) 1,421 ------ MONEY MARKET FUND (3.8%) STI Classic Prime Quality Money Market Fund, T Shares 209,828 210 ------ Total Money Market Fund (Cost $210) 210 ------ Total Investments (100.9%) (Cost $5,454) 5,567 ------ OTHER ASSETS AND LIABILITIES (-0.9%) Receivable from Distributor 1 Other Assets and Liabilities, Net (52) ------ Total Other Assets and Liabilities (51) ------ -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 2,765 outstanding shares of beneficial interest $ 30 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 43,628 outstanding shares of beneficial interest 477 Paid in Capital -- B Shares (unlimited authorization -- no par value) based on 461,435 outstanding shares of beneficial interest 4,874 Undistributed net investment income 12 Accumulated net realized gain on investments 10 Net unrealized appreciation on investments 113 ------ Total Net Assets (100.0%) $5,516 ====== Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($30,059 / 2,765 shares) $10.87 ====== Net Asset Value and Redemption Price Per Share -- A Shares ($473,958 / 43,628 shares) $10.86 ====== Maximum Offering Price Per Share -- A Shares ($10.86 / 96.25%) $11.28 ====== Net Asset Value and Offering Price Per Share -- B Shares (1) ($5,011,868 / 461,435 shares) $10.86 ====== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 82 -------------------------------------------------------------------------------- LIFE VISION GROWTH AND INCOME FUND+ -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- EQUITY FUNDS (70.7%) STI Classic Capital Appreciation Fund, T Shares 1,311,482 $16,170 STI Classic Growth and Income Fund, T Shares 978,772 14,408 STI Classic International Equity Index Fund, T Shares 1,157,109 12,855 STI Classic Mid-Cap Equity Fund, T Shares 438,382 4,524 STI Classic Small Cap Growth Stock Fund, T Shares 180,273 3,651 STI Classic Small Cap Value Equity Fund, T Shares 199,310 3,639 STI Classic Value Income Stock Fund, T Shares 701,883 8,051 ------- Total Equity Funds (Cost $54,182) 63,298 ------- FIXED INCOME FUNDS (26.3%) STI Classic High Income Fund, T Shares 593,304 4,379 STI Classic Institutional Total Return Bond Fund, T Shares 712,989 6,994 STI Classic Limited-Term Federal Mortgage Securities Fund, T Shares 770,372 7,842 STI Classic U.S. Government Securities Fund, T Shares 421,705 4,365 ------- Total Fixed Income Funds (Cost $23,752) 23,580 ------- MONEY MARKET FUND (3.0%) STI Classic Prime Quality Money Market Fund, T Shares 2,679,990 2,680 ------- Total Money Market Fund (Cost $2,680) 2,680 ------- Total Investments (100.0%) (Cost $80,614) 89,558 ------- OTHER ASSETS AND LIABILITIES (0.0%) Investment Advisory Fees Payable (10) Administration Fees Payable (5) Distribution Fees Payable (4) Other Assets andLiabilities, Net 30 ------- Total Other Assets and Liabilities 11 ------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 6,978,237 outstanding shares of beneficial interest $72,175 Paid in Capital -- A Shares (unlimited authorization --- no par value) based on 132,677 outstanding shares of beneficial interest 1,413 Paid in Capital -- B Shares (unlimited authorization -- no par value) based on 1,216,152 outstanding shares of beneficial interest 12,119 Undistributed net investment income 133 Accumulated net realized loss on investments (5,215) Net unrealized appreciation on investments 8,944 ------- Total Net Assets (100.0%) $89,569 ======= Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($75,082,805 / 6,978,237 shares) $10.76 ======= Net Asset Value and Redemption Price Per Share -- A Shares ($1,426,052 / 132,677 shares) $10.75 ======= Maximum Offering Price Per Share -- A Shares ($10.75 / 96.25%) $11.17 ======= Net Asset Value and Offering Price Per Share -- B Shares (1) ($13,060,578 / 1,216,152 shares) $10.74 ======= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 83 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 LIFE VISION MODERATE GROWTH FUND+ -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- EQUITY FUNDS (56.0%) STI Classic Capital Appreciation Fund, T Shares 1,586,543 $ 19,562 STI Classic Growth and Income Fund, T Shares 856,374 12,606 STI Classic International Equity Index Fund, T Shares 1,671,389 18,569 STI Classic Mid-Cap Equity Fund, T Shares 681,900 7,037 STI Classic Small Cap Growth Stock Fund, T Shares 420,646 8,518 STI Classic Small Cap Value Equity Fund, T Shares 387,546 7,077 STI Classic Value Income Stock Fund, T Shares 363,902 4,174 -------- Total Equity Funds (Cost $64,077) 77,543 -------- FIXED INCOME FUNDS (41.2%) STI Classic High Income Fund, T Shares 922,602 6,809 STI Classic Institutional Total Return Bond Fund, T Shares 2,078,959 20,395 STI Classic Limited-Term Federal Mortgage Securities Fund, T Shares 2,262,902 23,035 STI Classic U.S. Government Securities Fund, T Shares 655,802 6,788 -------- Total Fixed Income Funds (Cost $57,343) 57,027 -------- MONEY MARKET FUND (2.8%) STI Classic Prime Quality Money Market Fund, T Shares 3,898,065 3,898 -------- Total Money Market Fund (Cost $3,898) 3,898 -------- Total Investments (100.0%) (Cost $125,318) 138,468 -------- OTHER ASSETS AND LIABILITIES (0.0%) Investment Advisory Fees Payable (16) Administration Fees Payable (8) Distribution Fees Payable (6) Custodian Fees Payable (1) Transfer Agent Shareholder Servicing Fees Payable (1) -------- Total Other Assets and Liabilities (32) -------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization --- no par value) based on 12,089,343 outstanding shares of beneficial interest $115,189 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 352,192 outstanding shares of beneficial interest 3,517 Paid in Capital -- B Shares (unlimited authorization -- no par value) based on 1,320,167 outstanding shares of beneficial interest 12,238 Undistributed net investment income 340 Accumulated net realized loss on investments (5,998) Net unrealized appreciation on investments 13,150 -------- Total Net Assets (100.0%) $138,436 ======== Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($121,658,938 / 12,089,343 shares) $10.06 ======== Net Asset Value and Redemption Price Per Share -- A Shares ($3,541,288 / 352,192 shares) $10.05 ======== Maximum Offering Price Per Share -- A Shares ($10.05 / 96.25%) $10.44 ======== Net Asset Value and Offering Price Per Share -- B Shares (1) ($13,235,793 / 1,320,167 shares) $10.03 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 84 -------------------------------------------------------------------------------- MID-CAP EQUITY FUND -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK (99.5%) BASIC MATERIALS (7.2%) Ball 63,200 $ 4,317 Lennar, Cl A 39,800 1,827 Lubrizol 51,150 1,694 MDC Holdings 27,300 1,756 NVR* (D) 3,280 1,501 Ryland Group 50,000 3,980 -------- 15,075 -------- CAPITAL GOODS (5.7%) Acuity Brands 42,720 1,054 American Axle & Manufacturing Holdings* 59,000 2,062 Eaton 37,140 2,167 Freeport-McMoRan Copper & Gold, Cl B 21,020 707 MTC Technologies* 20,000 531 Rockwell Collins 101,940 3,062 Textron 44,900 2,454 -------- 12,037 -------- COMMUNICATION SERVICES (1.1%) Avaya* 118,797 1,881 Western Wireless* 16,700 457 -------- 2,338 -------- COMPUTER SOFTWARE (6.3%) BMC Software* 41,825 738 Computer Associates International 44,095 1,193 Electronic Arts* 69,100 3,512 Intuit* 44,790 1,755 Siebel Systems* 92,430 998 Storage Technology* 32,930 930 Sungard Data Systems* 27,500 762 Symantec* 41,760 1,913 Veritas Software* 54,875 1,460 -------- 13,261 -------- CONSUMER CYCLICALS (14.5%) 7-Eleven* 79,700 1,368 Abercrombie & Fitch, Cl A* 73,500 2,678 Big 5 Sporting Goods* 45,880 1,120 Choice Hotels International 63,600 3,046 Coach* 26,900 1,173 Dollar General 72,900 1,414 Limited Brands 34,310 662 Marvel Enterprises* (D) 20,615 418 May Department Stores 101,800 2,918 McGraw-Hill 30,700 2,392 New York Times, Cl A 27,740 1,294 RadioShack 32,040 974 -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- CONSUMER CYCLICALS -- CONTINUED Scholastic* 46,900 $ 1,324 Sears Roebuck 23,000 874 Staples 49,200 1,357 TJX 66,060 1,646 Xerox* 170,960 2,315 Yum! Brands* 96,400 3,615 -------- 30,588 -------- CONSUMER STAPLES (3.1%) Archer-Daniels-Midland 27,780 462 HJ Heinz 71,080 2,654 RJ Reynolds Tobacco Holdings 58,880 3,309 -------- 6,425 -------- ENERGY (4.9%) Amerada Hess 47,530 3,355 Arch Coal 22,000 715 Ashland 58,600 2,763 Marathon Oil 101,720 3,392 -------- 10,225 -------- FINANCE (22.9%) Annaly Mortgage Management REIT (D) 94,040 1,671 Arch Capital Group* 11,100 428 Bear Stearns 7,530 610 Brandywine Realty Trust REIT 34,130 918 Cigna 61,700 4,183 Comerica 62,810 3,556 Countrywide Financial 19,510 1,258 E*TRADE Financial* 90,590 1,034 Equity Office Properties Trust REIT 77,300 2,083 First Citizens Bancshares, Cl A 18,600 2,158 Hospitality Properties Trust 82,600 3,381 Jefferies Group 37,500 1,227 Legg Mason 8,728 766 Lexington Corporate Properties Trust REIT 69,270 1,327 Lincoln National 65,840 3,127 MBIA 14,900 825 PartnerRe 37,500 2,096 PMI Group 43,790 1,890 Radian Group 52,700 2,424 Senior Housing Properties Trust 55,726 907 St. Paul Travelers 56,470 2,241 Student Loan 29,200 4,208 Union Planters 34,700 1,045 UnionBanCal 23,910 1,377 Webster Financial 71,740 3,360 -------- 48,100 -------- 85 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 MID-CAP EQUITY FUND--CONCLUDED -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- HEALTH CARE (9.4%) Anthem* 46,400 $ 4,108 Biogen Idec* 70,660 4,391 Coventry Health Care* 24,185 1,114 Humana* 68,280 1,166 ImClone Systems* 22,900 1,695 Kinetic Concepts* 11,800 572 Laboratory Corp of America Holdings* 36,350 1,503 Onyx Pharmaceuticals* 14,851 698 Pacificare Health Systems* 19,680 727 Sepracor* 32,900 1,464 Zimmer Holdings* 26,500 2,262 -------- 19,700 -------- SEMICONDUCTORS (3.7%) Altera* 50,834 1,164 Arrow Electronics* 78,795 2,145 Molex (D) 41,890 1,230 National Semiconductor* 63,400 1,374 Sanmina-SCI* 182,900 1,935 -------- 7,848 -------- SERVICES (4.9%) Caesar's Entertainment* 12,240 169 Deluxe 39,100 1,674 Electronic Data Systems 36,980 605 H&R Block 39,760 1,942 International Game Technology 34,000 1,336 Iron Mountain* (D) 13,600 602 Knight-Ridder 23,600 1,793 ServiceMaster 129,110 1,570 Universal Technical Institute* 15,720 641 -------- 10,332 -------- TECHNOLOGY (7.5%) Advanced Micro Devices* 38,600 600 Apple Computer* 20,530 576 Avnet* 74,000 1,732 Corning* 143,000 1,772 Lam Research* 31,800 799 LSI Logic* 103,670 850 Monsanto* 104,360 3,600 Network Associates* 25,060 417 Novellus Systems* 54,880 1,827 Pitney Bowes 81,520 3,614 -------- 15,787 -------- TRANSPORTATION (0.8%) Ryder System 48,100 1,787 -------- -------------------------------------------------------------------------------- SHARES/FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- UTILITIES (7.5%) Citizens Communications* 91,320 $ 1,160 Edison International 60,310 1,456 Equitable Resources 88,300 4,274 Northeast Utilities 165,900 3,168 UGI 134,500 4,316 Xcel Energy 80,870 1,374 -------- 15,748 -------- Total Common Stock (Cost $186,642) 209,251 -------- CASH EQUIVALENT (2.2%) Boston Global Investment Trust -- Enhanced Portfolio (A) 4,603,100 4,603 -------- Total Cash Equivalent (Cost $4,603) 4,603 -------- REPURCHASE AGREEMENT (1.3%) BNP Paribas 0.980%, dated 05/28/04, to be repurchased on 06/01/04, repurchase price $2,630,779 (collateralized by FNMA obligations; total market value $2,683,627) (C) $2,631 2,631 -------- Total Repurchase Agreement (Cost $2,631) 2,631 -------- Total Investments (103.0%) (Cost $193,876) 216,485 -------- OTHER ASSETS AND LIABILITIES (-3.0%) Payable Upon Return of Securities Loaned (4,603) Investment Advisory Fees Payable (198) Distribution Fees Payable (12) Administration Fees Payable (12) Custodian Fees Payable (2) Transfer Agent Shareholder Servicing Fees Payable (1) Other Assets and Liabilities, Net (1,406) -------- Total Other Assets and Liabilities (6,234) -------- 86 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 17,168,117 outstanding shares of beneficial interest $179,467 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 1,725,977 outstanding shares of beneficial interest 16,821 Paid in Capital -- L Shares (unlimited authorization -- no par value) based on 1,720,470 outstanding shares of beneficial interest 20,096 Undistributed net investment income 77 Accumulated net realized loss on investments (28,819) Net unrealized appreciation on investments 22,609 -------- Total Net Assets (100.0%) $210,251 ======== Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($177,128,000 / 17,168,117 shares) $10.32 ======== Net Asset Value and Redemption Price Per Share -- A Shares ($17,125,195 / 1,725,977 shares) $9.92 ======== Maximum Offering Price Per Share -- A Shares ($9.92 / 96.25%) $10.31 ======== Net Asset Value and Offering Price Per Share -- L Shares (1) ($15,998,255 / 1,720,470 shares) $9.30 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 87 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 MID-CAP VALUE EQUITY FUND -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK (96.0%) BASIC MATERIALS (6.6%) Air Products & Chemicals 38,500 $ 1,924 Bemis 48,000 1,322 Lubrizol (D) 63,300 2,096 PPG Industries 38,500 2,302 Pulte Homes 14,700 776 Sappi Ltd. ADR 135,000 1,902 ---------- 10,322 ---------- CAPITAL GOODS (8.2%) American Power Conversion (D) 71,600 1,296 Empresa Brasileira de Aeronautica ADR* (D) 62,600 1,594 Lear 18,600 1,102 Masco 68,400 1,980 Pentair (D) 24,200 1,483 Rockwell Automation 57,000 1,930 Sonoco Products 60,600 1,509 Teleflex 41,300 1,919 ---------- 12,813 ---------- COMMUNICATION SERVICES (3.2%) Belo, Cl A (D) 53,800 1,583 CenturyTel (D) 88,500 2,645 Harris 17,100 791 ---------- 5,019 ---------- CONSUMER CYCLICALS (13.6%) Abercrombie & Fitch, Cl A* (D) 55,400 2,018 Blyth (D) 68,900 2,250 Dollar General 144,900 2,811 Hilton Hotels 103,200 1,791 Leggett & Platt 102,900 2,601 Mattel 148,300 2,592 Performance Food Group* (D) 37,400 1,228 Pier 1 Imports (D) 97,000 1,828 Regal Entertainment Group 70,500 1,509 RR Donnelley & Sons 47,100 1,425 VF 23,600 1,109 ---------- 21,162 ---------- CONSUMER STAPLES (6.5%) Adolph Coors, Cl B (D) 16,300 1,050 Bunge 19,000 705 Clorox 39,300 2,058 HJ Heinz 58,000 2,166 Outback Steakhouse 27,300 1,159 PepsiAmericas 53,200 1,130 Smithfield Foods* (D) 62,600 1,815 ---------- 10,083 ---------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- ENERGY (5.0%) Anadarko Petroleum 21,400 $ 1,167 Cooper Cameron* (D) 18,900 876 GlobalSantaFe 50,600 1,272 Marathon Oil 55,500 1,850 Noble Energy 28,900 1,310 Tidewater (D) 47,400 1,310 ---------- 7,785 ---------- FINANCE (25.9%) AG Edwards (D) 39,600 1,481 American Financial Group 45,200 1,366 Assurant 51,900 1,303 Assured Guaranty* 93,600 1,591 Astoria Financial (D) 40,800 1,562 Banknorth Group (D) 41,900 1,380 Bear Stearns 18,900 1,532 Comerica 22,800 1,291 Developers Diversified Realty REIT 49,400 1,699 Equity Residential REIT 37,800 1,113 First Industrial Realty Trust REIT (D) 32,600 1,168 FirstMerit (D) 63,400 1,566 Hartford Financial Services Group (D) 22,400 1,481 Keycorp 47,600 1,495 Nationwide Financial Services, Cl A (D) 39,300 1,436 Northern Trust 44,900 1,929 Old Republic International 63,550 1,446 PartnerRe 26,400 1,475 PMI Group 42,000 1,813 Protective Life 21,400 791 Provident Financial Services (D) 103,500 1,888 Regions Financial 61,200 2,328 Safeco 18,500 776 South Financial Group (D) 56,300 1,552 SouthTrust 46,700 1,582 Vornado Realty Trust 29,100 1,590 Zions Bancorporation 27,900 1,710 ---------- 40,344 ---------- HEALTH CARE (5.5%) AmerisourceBergen 19,900 1,194 Health Management Associates, Cl A (D) 123,700 2,720 IVAX* (D) 54,900 1,337 Mylan Laboratories 84,900 1,894 Shire Pharmaceuticals ADR* 48,600 1,341 ---------- 8,486 ---------- 88 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- SERVICES (4.8%) Brink's 47,500 $ 1,469 Cintas (D) 46,200 2,097 Knight-Ridder (D) 13,200 1,003 Reynolds & Reynolds, Cl A 64,200 1,926 Viad 37,400 938 ---------- 7,433 ---------- TECHNOLOGY (8.8%) Autodesk 36,600 1,312 Avnet* 44,300 1,037 Celestica* (D) 82,900 1,558 Diebold 31,500 1,547 Ingram Micro, Cl A* 56,800 821 Intersil, Cl A 112,700 2,395 Network Associates* 67,500 1,124 Pitney Bowes 30,700 1,361 Storage Technology* 41,900 1,184 Vishay Intertechnology* (D) 66,400 1,253 ---------- 13,592 ---------- TRANSPORTATION (1.9%) Skywest (D) 82,500 1,380 Werner Enterprises (D) 81,600 1,558 ---------- 2,938 ---------- UTILITIES (6.0%) Ameren (D) 24,500 1,083 American Electric Power 30,000 953 FirstEnergy 28,400 1,107 FPL Group (D) 14,300 912 KeySpan (D) 21,800 772 NiSource 58,800 1,191 Pinnacle West Capital (D) 23,300 939 PPL 28,300 1,221 Progress Energy (D) 27,800 1,184 ---------- 9,362 ---------- Total Common Stock (Cost $132,478) 149,339 ---------- CASH EQUIVALENTS (24.8%) Boston Global Investment Trust -- Enhanced Portfolio (A) 31,010,725 31,011 -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- CASH EQUIVALENTS -- CONTINUED Federated Prime Money Market Obligations Fund 2,562,393 $ 2,562 Federated Prime Value Money Market Fund 5,070,668 5,071 ---------- Total Cash Equivalents (Cost $38,644) 38,644 ---------- Total Investments (120.8%) (Cost $171,122) 187,983 ---------- OTHER ASSETS AND LIABILITIES (-20.8%) Payable Upon Return of Securities Loaned (31,011) Investment Advisory Fees Payable (146) Administration Fees Payable (9) Custodian Fees Payable (1) Distribution Fees Payable (1) Trustees' Fees Payable (1) Other Assets and Liabilities, Net (1,139) ---------- Total Other Assets and Liabilities (32,308) ---------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 13,435,972 outstanding shares of beneficial interest 147,943 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 55,794 outstanding shares of beneficial interest 586 Paid in Capital -- L Shares (unlimited authorization -- no par value) based on 723,199 outstanding shares of beneficial interest 7,298 Undistributed net investment income 142 Accumulated net realized loss on investments (17,155) Net unrealized appreciation on investments 16,861 ---------- Total Net Assets (100.0%) $ 155,675 ========== Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($147,184,475 / 13,435,972 shares) $10.95 ========== Net Asset Value and Redemption Price Per Share -- A Shares ($610,294 / 55,794 shares) $10.94 ========== Maximum Offering Price Per Share -- A Shares ($10.94 / 96.25%) $11.37 ========== Net Asset Value and Offering Price Per Share -- L Shares (1) ($7,879,935 / 723,199 shares) $10.90 ========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 89 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 SMALL CAP GROWTH STOCK FUND -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK (99.1%) BASIC MATERIALS (3.5%) Agrium 280,000 $ 3,685 Commercial Metals 200,000 6,020 Georgia Gulf (D) 160,000 5,411 Hercules* (D) 250,000 2,645 Imco Recycling* 330,000 4,158 Reliance Steel & Aluminum (D) 115,000 4,208 Silgan Holdings* 110,000 4,613 ---------- 30,740 ---------- CAPITAL GOODS (10.5%) Actuant* (D) 185,000 6,333 Albany International, Cl A (D) 180,000 5,488 American Axle & Manufacturing Holdings* (D) 45,000 1,573 Bandag (D) 75,000 3,178 Bennett Environmental* (D) 250,000 3,310 Briggs & Stratton (D) 100,000 7,588 Copart* 80,000 1,972 Dycom Industries* (D) 195,000 4,815 ElkCorp (D) 185,000 4,588 Encore Wire* (D) 175,000 5,331 Fedders 366,921 1,629 Gardner Denver* 80,000 2,095 Griffon* (D) 300,000 6,984 Ii-Vi* 60,000 1,547 Mercury Computer Systems* 164,783 3,696 Mueller Industries (D) 140,000 4,578 Noble International 205,000 5,914 Orbital Sciences* (D) 265,000 3,326 Sensytech* 210,000 4,530 Simpson Manufacturing (D) 85,000 4,658 Thor Industries (D) 230,000 6,396 Ultralife Batteries* (D) 90,000 1,797 ---------- 91,326 ---------- COMMUNICATION SERVICES (2.9%) Anaren* 52,800 840 Ditech Communications* 340,000 7,007 EMS Technologies* 210,000 4,569 Network Equipment Technologies* (D) 257,289 1,894 Nice Systems* 190,000 4,146 Radyne ComStream (D) 530,000 4,622 Symmetricom* (D) 200,000 1,580 TTI Team Telecom International* 135,400 523 ---------- 25,181 ---------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- COMPUTER SOFTWARE (9.1%) Activision* (D) 300,000 $ 4,746 American Software, Cl A 560,000 3,578 Ansys* 90,100 3,882 Ascential Software* 100,000 1,605 Aspen Technology* 530,000 3,344 Authentidate Holding* 440,000 5,544 Captiva Software* 430,000 4,330 Ciber* (D) 170,000 1,513 Digi International* 480,000 4,987 Epicor Software* (D) 175,000 2,343 Hyperion Solutions* (D) 130,000 5,153 Lionbridge Technologies* 520,000 4,072 SafeNet* (D) 114,000 2,656 Secure Computing* (D) 360,000 3,190 Sonic Solutions* (D) 250,000 5,313 THQ* (D) 220,000 4,640 Transaction Systems Architects, Cl A* (D) 285,000 5,378 Verint Systems* 206,888 6,366 WebEx Communications* (D) 300,000 7,083 ---------- 79,723 ---------- CONSUMER CYCLICALS (18.1%) 4Kids Entertainment* (D) 230,000 4,979 Aeropostale* (D) 240,000 6,310 America's Car Mart* (D) 60,000 1,770 AnnTaylor Stores* (D) 90,000 2,548 Bebe Stores* (D) 260,000 5,195 Bombay* (D) 340,000 1,979 Brown Shoe (D) 100,000 4,133 Cache* 240,000 6,242 Cash America International 60,000 1,210 Casual Male Retail Group* (D) 350,000 2,380 CBRL Group (D) 130,000 4,192 CellStar* 190,000 1,149 Christopher & Banks (D) 80,000 1,520 Coldwater Creek* (D) 45,000 1,197 Conn's* (D) 180,000 3,071 Cooper Tire & Rubber (D) 200,000 4,218 CSK Auto* (D) 360,000 6,174 Electronics Boutique Holdings* (D) 125,000 3,445 Furniture Brands International (D) 50,000 1,289 Genesco* (D) 150,000 3,765 Goody's Family Clothing (D) 302,831 3,616 Guitar Center* (D) 150,000 6,435 Hooker Furniture 104,835 2,245 90 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- CONSUMER CYCLICALS -- CONTINUED HOT Topic* (D) 140,000 $ 3,025 Hovnanian Enterprises, Cl A* 50,000 1,765 Jos A. Bank Clothiers* (D) 275,000 8,962 K2* (D) 250,000 3,680 Levitt* 90,000 2,163 MarineMax* 160,000 4,264 O'Charleys* (D) 220,000 4,006 O'Reilly Automotive* (D) 55,000 2,471 Penn National Gaming* 250,000 7,495 Prime Hospitality* 350,000 3,469 Quiksilver* (D) 130,000 3,012 Rare Hospitality International* (D) 190,000 4,860 Select Comfort* (D) 220,000 5,962 Sonic* (D) 120,000 2,662 Sports Authority* (D) 170,000 5,797 Standard-Pacific 6,770 345 Steak N Shake* 119,082 2,095 Steiner Leisure* (D) 280,000 5,485 Tuesday Morning* 150,000 4,283 Zale* (D) 60,000 3,274 ---------- 158,137 ---------- CONSUMER STAPLES (2.9%) Cott* 210,000 6,669 DEL Laboratories* 75,000 2,160 Jarden* (D) 160,000 5,600 Rayovac* 140,000 3,794 Sanderson Farms (D) 75,000 3,450 Smart & Final* 220,000 3,419 ---------- 25,092 ---------- ENERGY (6.4%) Cal Dive International* (D) 160,000 4,495 Comstock Resources* 90,000 1,693 Core Laboratories* 220,000 4,609 Denbury Resources* (D) 100,000 1,840 Energen (D) 80,000 3,584 Harvest Natural Resources* 350,000 4,445 Headwaters* (D) 300,000 6,270 Key Energy Services* 300,000 2,904 Magnum Hunter Resources* (D) 500,000 5,035 Maverick Tube* (D) 225,000 5,175 National-Oilwell* (D) 140,000 3,875 Premcor* (D) 145,000 5,311 Torch Offshore* (D) 92,848 245 Ultra Petroleum* 110,000 3,372 Unit* 100,000 2,849 ---------- 55,702 ---------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- FINANCE (5.2%) Affiliated Managers Group* (D) 110,000 $ 5,363 American Safety Insurance Holdings Ltd.* 115,000 1,566 Arch Capital Group* (D) 90,000 3,472 Bank of the Ozarks (D) 120,000 2,904 BankAtlantic Bancorp, Cl A 200,000 3,200 Fremont General (D) 180,685 4,056 Northwest Bancorp 90,000 2,002 Phoenix (D) 350,000 4,099 R&G Financial, Cl B 160,000 5,019 RLI* 70,000 2,518 South Financial Group (D) 115,000 3,170 United Community Banks 90,000 2,130 Westcorp 135,000 5,798 ---------- 45,297 ---------- HEALTH CARE (13.9%) American Medical Security Group* 190,000 4,908 Andrx* (D) 160,000 4,397 Applera - Celera Genomics Group* (D) 125,901 1,414 Axcan Pharma* 200,000 3,846 Bradley Pharmaceuticals* (D) 260,000 6,053 Conmed* (D) 160,000 4,072 Connetics* (D) 300,000 6,411 Dendrite International* (D) 170,000 2,854 Endo Pharmaceuticals Holdings* 100,000 2,264 Gentiva Health Services* (D) 230,000 3,652 Guilford Pharmaceuticals* (D) 220,000 1,364 Hologic* (D) 80,000 1,645 ICU Medical* (D) 85,000 2,831 Integra LifeSciences Holdings* (D) 110,000 3,528 Kos Pharmaceuticals* (D) 110,000 3,660 Martek Biosciences* (D) 110,000 7,037 Palomar Medical Technologies* (D) 170,000 2,859 Per-Se Technologies* 286,400 3,723 Possis Medical* (D) 270,000 7,700 Protein Design Labs* 377,109 7,357 Province Healthcare* (D) 250,000 4,005 Renal Care Group* (D) 165,000 5,407 Salix Pharmaceuticals* 170,000 5,129 Select Medical 180,000 2,414 Sierra Health Services* (D) 120,000 5,135 Sybron Dental Specialties* (D) 120,000 3,269 Taro Pharmaceuticals Industries* (D) 30,000 1,323 Ventana Medical Systems* (D) 120,000 6,192 WellChoice* (D) 100,000 4,118 West Pharmaceutical Services 60,000 2,281 ---------- 120,848 ---------- 91 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 SMALL CAP GROWTH STOCK FUND--CONCLUDED -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- SEMICONDUCTORS (3.3%) Axcelis Technologies* (D) 380,000 $ 4,579 Cypress Semiconductor* (D) 430,000 7,034 Integrated Device Technology* (D) 460,000 6,707 NAM TAI Electronics 150,000 2,829 Power-One* (D) 600,000 6,048 Standard Microsystems* 64,200 1,584 ---------- 28,781 ---------- SERVICES (7.3%) Concorde Career Colleges* 95,000 1,404 Corrections Corp of America* (D) 135,000 5,165 Dollar Thrifty Automotive Group* (D) 160,000 4,195 Getty Images* (D) 50,000 2,815 Gevity HR (D) 300,000 7,863 Global Payments 30,000 1,400 Kforce* (D) 300,000 2,748 Kroll* 250,000 9,135 Labor Ready* (D) 240,000 2,921 MPS Group* 140,000 1,551 Navigant Consulting* (D) 380,000 7,771 SM&A* 385,500 3,123 Ultimate Software Group* 400,000 5,140 Ultimate Software Group* (B)(E) (F) 180,000 2,128 Unifirst 160,000 4,160 Volt Information Sciences* 82,000 2,107 ---------- 63,626 ---------- TECHNOLOGY (11.1%) Advanced Power Technology* 93,000 1,229 Aeroflex* (D) 350,000 4,466 AMX* 240,000 2,398 Anteon International* (D) 185,000 5,450 ATMI* (D) 250,000 6,405 Avocent* (D) 100,000 3,427 C-COR.net* (D) 400,000 3,556 CACI International, Cl A* 100,000 3,714 Computer Network Technology* (D) 127,533 770 Creo Products* 350,000 2,824 CTS (D) 234,227 2,553 Dot Hill Systems* 580,000 5,510 Hypercom* (D) 725,000 4,872 InfoCrossing* (B) (E) (F) 122,000 1,482 InfoCrossing (D) 415,000 5,478 Itron* (D) 100,000 2,064 IXYS* 400,000 3,740 Kemet* 150,000 1,822 -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- TECHNOLOGY -- CONTINUED Lexar Media* (D) 160,000 $ 1,514 Newport* 100,000 1,453 Performance Technologies* 235,000 2,547 Radisys* 50,000 833 Rofin-Sinar Technologies* (D) 240,000 6,281 Rogers* (D) 130,000 7,988 Silicon Storage Technology* (D) 210,000 2,719 Telecommunication Systems* (D) 700,000 3,549 Transact Technologies* 175,000 5,639 Trimble Navigation Ltd.* (D) 80,000 2,162 ---------- 96,445 ---------- TRANSPORTATION (4.9%) Celadon Group* 247,000 3,562 General Maritime* 100,000 2,424 JB Hunt Transport Services* (D) 190,000 6,220 Marten Transport Ltd.* 295,000 5,121 OMI* 420,000 4,410 Overnite* 100,000 2,614 Pacer International* 140,000 2,673 PAM Transportation Services* 170,000 3,145 Skywest (D) 270,510 4,526 US Xpress Enterprises, Cl A* 163,000 2,111 Werner Enterprises (D) 295,000 5,631 ---------- 42,437 ---------- Total Common Stock (Cost $701,325) 863,335 ---------- PREFERRED STOCK (0.1%) CAPITAL GOODS (0.1%) Fedders 21,500 504 ---------- Total Preferred Stock (Cost $510) 504 ---------- WARRANTS (0.1%) InfoCrossing, Expires 10/31/08* (B) (F) 139,109 743 ---------- Total Warrants (Cost $6) 743 ---------- CASH EQUIVALENT (37.9%) Boston Global Investment Trust -- Enhanced Portfolio (A) 330,530,988 330,531 ---------- Total Cash Equivalent (Cost $330,531) 330,531 --------- 92 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- REPURCHASE AGREEMENT (0.7%) BNP Paribas 0.980%, dated 05/28/04, to be repurchased on 06/01/04, repurchase price $5,692,774 (collateralized by FNMA obligations; total market value $5,807,159) (C) $5,692 $ 5,692 ---------- Total Repurchase Agreement (Cost $5,692) 5,692 ---------- Total Investments (137.9%) (Cost $1,038,064) 1,200,805 ---------- OTHER ASSETS AND LIABILITIES (-37.9%) Payable Upon Return of Securities Loaned (330,531) Investment Advisory Fees Payable (822) Administration Fees Payable (49) Distribution Fees Payable (37) Custodian Fees Payable (13) Transfer Agent Shareholder Servicing Fees Payable (4) Trustees' Fees Payable (1) Receivable from Affiliated Funds 2 Other Assets and Liabilities, Net 1,244 ---------- Total Other Assets and Liabilities (330,211) ---------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 38,997,522 outstanding shares of beneficial interest $583,262 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 2,037,532 outstanding shares of beneficial interest 30,272 Paid in Capital -- L Shares (unlimited authorization -- no par value) based on 2,117,270 outstanding shares of beneficial interest 35,251 Accumulated net realized gain on investments 59,068 Net unrealized appreciation on investments 162,741 ---------- Total Net Assets (100.0%) $870,594 ========== Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($789,650,194 / 38,997,522 shares) $20.25 ========== Net Asset Value and Redemption Price Per Share -- A Shares ($40,590,116 / 2,037,532 shares) $19.92 ========== Maximum Offering Price Per Share -- A Shares ($19.92 / 96.25%) $20.70 ========== Net Asset Value and Offering Price Per Share -- L Shares (1) ($40,353,999 / 2,117,270 shares) $19.06 ========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 93 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 SMALL CAP VALUE EQUITY FUND -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK (99.9%) BASIC MATERIALS (5.1%) Agnico-Eagle Mines* 536,800 $ 7,467 Airgas 548,600 11,948 Cia Siderurgica Nacional ADR 59,300 2,764 Sappi Ltd. ADR (D) 458,100 6,455 Sociedad Quimica Minera de Chile ADR 75,900 2,703 United States Steel 194,700 5,911 -------- 37,248 -------- CAPITAL GOODS (17.3%) Baldor Electric (D) 322,100 7,460 BorgWarner 271,400 11,247 Briggs & Stratton (D) 101,600 7,709 Cummins (D) 219,600 12,790 Empresa Brasileira de Aeronautica ADR* (D) 441,616 11,244 Harsco 167,200 7,258 Lennox International (D) 258,789 4,265 LSI Industries 509,187 5,856 Makita ADR* (D) 814,200 11,594 Oshkosh Truck 136,600 7,069 Quixote 368,300 7,734 Snap-On 238,600 8,024 Tecumseh Products, Cl A 80,300 2,981 Tenaris ADR (D) 104,773 3,468 Valmont Industries 360,100 7,490 Valspar 230,700 11,000 -------- 127,189 -------- COMMUNICATION SERVICES (2.9%) Harris 454,728 21,027 -------- CONSUMER CYCLICALS (16.1%) Bassett Furniture Industries 228,300 4,344 Benetton Group ADR* (D) 431,700 9,782 Blyth 158,100 5,162 CBRL Group (D) 296,800 9,572 Fairmont Hotels & Resorts 302,900 7,454 Grupo Elektra* 260,300 5,464 Intrawest (D) 443,100 6,602 John H. Harland 248,600 7,533 John Wiley & Sons, Cl A (D) 213,800 6,799 Lithia Motors (D) 271,300 6,489 Media General, Cl A 113,300 7,797 Movado Group 192,300 5,904 Natuzzi ADR 284,500 2,942 Nautilus Group (D) 579,200 8,729 Pier 1 Imports 474,900 8,952 Sturm Ruger 139,100 1,648 United Auto Group 276,100 7,988 Winnebago Industries 163,000 4,629 -------- 117,790 -------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- CONSUMER STAPLES (4.1%) Adolph Coors, Cl B (D) 106,300 $ 6,851 Church & Dwight 264,300 11,999 Ingles Markets, Cl A 86,800 920 JM Smucker 206,043 10,076 -------- 29,846 -------- ENERGY (2.8%) Arch Coal 246,300 8,005 Peabody Energy 259,100 12,887 -------- 20,892 -------- FINANCE (15.7%) American Financial Group 212,000 6,404 Banner 120,300 3,513 City National 125,500 8,104 Colonial BancGroup 420,400 7,559 First National Bankshares of Florida (D) 248,633 4,838 FNB (D) 138,133 2,757 Glacier Bancorp 194,746 5,145 HCC Insurance Holdings (D) 284,600 9,432 Horizon Financial 242,706 4,471 Hub International* (D) 694,600 13,072 Jefferies Group (D) 261,800 8,569 PXRE Group Ltd. 180,500 4,491 Scottish Annuity & Life Holdings Ltd. (D) 182,900 4,024 Seacoast Banking Corp of Florida 227,700 4,563 Stancorp Financial Group 198,100 12,696 Washington Federal (D) 192,913 4,613 West Coast Bancorp 239,453 5,270 Wilmington Trust 161,500 5,943 -------- 115,464 -------- HEALTH CARE (8.8%) Cambrex 434,800 9,935 Cooper (D) 433,200 23,913 Invacare (D) 166,800 6,917 Mentor 431,700 13,836 Perrigo 470,200 9,620 -------- 64,221 -------- SEMICONDUCTORS (1.2%) NAM TAI Electronics 455,700 8,594 -------- SERVICES (9.5%) ABM Industries 352,300 6,701 Brink's (D) 651,000 20,135 Chemed (D) 147,300 6,956 Factset Research Systems (D) 273,000 11,933 Reynolds & Reynolds, Cl A 795,800 23,874 -------- 69,599 -------- 94 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- TECHNOLOGY (11.6%) Autodesk 798,300 $ 28,627 Barra* 743,800 30,429 Fair Isaac (D) 199,500 6,933 Helix Technology (D) 321,100 6,383 Keithley Instruments 258,500 5,586 Premier Farnell ADR (D) 808,100 7,233 -------- 85,191 -------- TRANSPORTATION (3.2%) CHC Helicopter, Cl A* 408,800 11,311 CP Ships* (D) 672,600 12,181 -------- 23,492 -------- UTILITIES (1.6%) Allete 332,069 11,538 -------- Total Common Stock (Cost $559,675) 732,091 -------- CASH EQUIVALENTS (10.3%) Boston Global Investment Trust -- Enhanced Portfolio (A) 75,214,648 75,215 SEI Daily Income Trust Prime Obligation Fund, Cl A 37,201 37 -------- Total Cash Equivalents (Cost $75,252) 75,252 -------- Total Investments (110.2%) (Cost $634,927) 807,343 -------- OTHER ASSETS AND LIABILITIES (-10.2%) Payable Upon Return of Securities Loaned (75,215) Due to Custodian (3,441) Investment Advisory Fees Payable (708) Administration Fees Payable (42) Distribution Fees Payable (9) Custodian Fees Payable (6) Transfer Agent Shareholder Servicing Fees Payable (3) Trustees' Fees Payable (1) Receivable from Affiliated Funds 2 Other Assets and Liabilities, Net 4,927 -------- Total Other Assets and Liabilities (74,496) -------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 37,379,774 outstanding shares of beneficial interest $472,095 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 224,835 outstanding shares of beneficial interest 4,053 Paid in Capital -- L Shares (unlimited authorization -- no par value) based on 2,578,758 outstanding shares of beneficial interest 41,526 Undistributed net investment income 1,083 Accumulated net realized gain on investments 41,674 Net unrealized appreciation on investments 172,416 -------- Total Net Assets (100.0%) $732,847 ======== Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($682,566,743 / 37,379,774 shares) $18.26 ======== Net Asset Value and Redemption Price Per Share -- A Shares ($4,088,557 / 224,835 shares) $18.18 ======== Maximum Offering Price Per Share -- A Shares ($18.18 / 96.25%) $18.89 ======== Net Asset Value and Offering Price Per Share -- L Shares (1) ($46,191,829 / 2,578,758 shares) $17.91 ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 95 SCHEDULE OF INVESTMENTS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 STRATEGIC QUANTITATIVE EQUITY FUND -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK (100.0%) BASIC MATERIALS (11.0%) Belden 31,071 $ 525 Boise Cascade 14,519 510 Cabot 14,570 524 Centex 10,539 511 Cytec Industries 13,030 525 DR Horton 13,616 393 Eastman Chemical 19,658 911 FMC* 12,888 523 KB Home 7,757 511 MDC Holdings 6,213 400 NVR* 859 393 OM Group* 19,729 526 Pulte Homes 9,686 511 Ryland Group 4,959 395 Standard-Pacific 7,884 402 ------- 7,560 ------- CAPITAL GOODS (14.2%) AGCO* 27,564 528 Applied Materials* 12,945 258 Boeing 19,844 909 Briggs & Stratton 6,910 524 Eaton 15,484 905 Gardner Denver* 20,202 529 Griffon* 22,693 528 Harsco 11,935 518 Littelfuse* 5,727 227 Manitowoc 16,570 526 Masco 31,311 907 Meritage* 5,780 394 Paccar 16,011 893 Tektronix 8,155 257 Textron 16,488 901 Thomas & Betts* 36,981 905 ------- 9,709 ------- COMMUNICATION SERVICES (1.5%) CommScope* 13,049 225 Lucent Technologies* 71,725 256 Motorola 13,011 257 Tellabs* 32,412 258 ------- 996 ------- COMPUTER SOFTWARE (1.0%) Activision* 14,198 225 Advent Software* 11,755 222 Netegrity* 24,248 228 ------- 675 ------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- CONSUMER CYCLICALS (15.1%) Alberto-Culver 8,754 $ 412 AnnTaylor Stores* 14,080 399 Bed Bath & Beyond* 13,685 510 Black & Decker 8,667 519 Chico's FAS* 9,398 403 Claire's Stores 19,285 399 Coach* 9,195 401 Costco Wholesale* 10,752 406 Deere 13,771 905 Genesco* 15,803 397 Guitar Center* 9,077 389 Hibbett Sporting Goods* 15,470 402 J.C. Penney 14,275 511 Mandalay Resort Group 7,174 393 Midas* 20,956 401 Nash Finch 14,272 268 Nordstrom 12,593 511 Pacific Sunwear of California* 18,348 399 Sherwin-Williams 13,008 511 Starwood Hotels & Resorts Worldwide 12,009 506 Urban Outfitters* 7,338 403 Walt Disney 21,500 505 Wolverine World Wide 14,945 394 ------- 10,344 ------- CONSUMER STAPLES (3.9%) Anheuser-Busch 7,637 407 Constellation Brands* 7,616 274 Corn Products International 6,304 274 Dean Foods* 7,829 276 Great Atlantic & Pacific Tea* 38,292 265 Ruddick 13,394 275 Starbucks* 12,513 509 Supervalu 13,305 413 ------- 2,693 ------- ENERGY (13.3%) Cal Dive International* 19,054 535 CARBO Ceramics 7,571 529 ChevronTexaco 10,720 969 ConocoPhillips 13,248 971 Devon Energy 16,178 960 Exxon Mobil 22,189 960 Maverick Tube* 23,640 544 Newfield Exploration* 10,708 533 Prima Energy* 14,030 534 Southwestern Energy* 20,838 533 Stone Energy* 11,883 534 Swift Energy* 26,268 531 Valero Energy 14,734 974 XTO Energy 1 -- ------- 9,107 ------- 96 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- FINANCE (13.8%) ACE 8,227 $ 339 AG Edwards 11,544 432 Allstate 7,692 338 Bear Stearns 4,184 339 Countrywide Financial 5,269 340 E*TRADE Financial* 29,765 340 Fremont General 19,008 427 Goldman Sachs Group 3,617 340 Hartford Financial Services Group 5,119 338 HCC Insurance Holdings 13,041 432 Horace Mann Educators 25,359 429 Lehman Brothers Holdings 4,472 338 Lincoln National 7,155 340 Loews 5,896 340 Merrill Lynch 5,940 337 National City 9,549 339 New Century Financial 9,816 428 Philadelphia Consolidated Holding* 7,607 431 Progressive 3,925 337 Protective Life 11,647 431 Raymond James Financial 16,533 427 Selective Insurance Group 11,855 428 St Paul Travelers 8,498 337 UICI* 21,746 432 WR Berkley 10,300 429 ------- 9,468 ------- HEALTH CARE (7.3%) Anthem* 3,293 292 Biomet 7,216 289 C.R. Bard 2,612 293 Cooper 4,775 264 Coventry Health Care* 5,750 265 Dentsply International 5,316 263 Idexx Laboratories* 3,955 260 Johnson & Johnson 5,245 292 Lincare Holdings* 7,758 261 Medtronic 6,084 291 Patterson Dental* 3,474 264 RehabCare Group* 10,741 268 Resmed* 5,193 264 Stryker 5,724 291 UnitedHealth Group 4,498 293 Visx* 11,090 261 WellPoint Health Networks* 2,611 291 Zimmer Holdings* 3,433 293 ------- 4,995 ------- -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- SEMICONDUCTORS (4.6%) Altera* 11,133 $ 255 Arrow Electronics* 8,165 222 Artesyn Technologies* 57,304 524 Axcelis Technologies* 18,578 224 Brooks Automation* 10,978 227 Integrated Device Technology* 15,346 224 Kulicke & Soffa Industries* 19,793 227 National Semiconductor* 11,816 256 Park Electrochemical 8,969 224 PMC-- Sierra* 18,238 257 Teradyne* 11,586 258 Xilinx* 7,015 256 ------- 3,154 ------- SERVICES (3.4%) Brink's 16,919 523 Chemed 5,569 263 Consolidated Graphics* 13,349 536 eBay* 5,803 515 Time Warner* 29,952 511 ------- 2,348 ------- TECHNOLOGY (3.9%) Advanced Micro Devices* 16,572 257 Apple Computer* 9,112 256 Autodesk 7,148 256 Avnet* 9,649 226 C-COR.net* 24,812 221 Catapult Communications* 12,290 203 Corning* 20,886 259 Photon Dynamics* 7,113 229 Vishay Intertechnology* 11,924 225 Woodward Governor 7,980 530 ------- 2,662 ------- TRANSPORTATION (7.0%) Burlington Northern Santa Fe 27,421 903 CNF 13,445 524 JB Hunt Transport Services* 15,904 521 Norfolk Southern 37,723 914 Overseas Shipholding Group 14,078 537 Ryder System 24,437 908 Yellow Roadway* 14,619 522 ------- 4,829 ------- Total Common Stock (Cost $65,436) 68,540 ------- 97 SCHEDULE OF INVESTMENTS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 STRATEGIC QUANTITATIVE EQUITY FUND--CONCLUDED -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- REPURCHASE AGREEMENT (0.7%) Merrill Lynch 1.020%, dated 05/28/04, to be repurchased on 06/01/04, repurchase price $448,376 (collateralized by FNMA obligations; total market value $457,329) (C) $448 $ 448 ------- Total Repurchase Agreement (Cost $448) 448 ------- Total Investments (100.7%) (Cost $65,884) $68,988 ======= PERCENTAGES ARE BASED ON NET ASSETS OF $68,540,024. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 98 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- TAX SENSITIVE GROWTH STOCK FUND -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK (98.2%) CAPITAL GOODS (9.5%) 3M 56,132 $ 4,747 Danaher 116,000 5,455 General Electric 180,844 5,628 Illinois Tool Works 34,000 3,056 United Parcel Service, Cl B 51,600 3,701 --------- 22,587 --------- COMMUNICATION SERVICES (2.1%) Qualcomm 74,500 4,997 --------- CONSUMER CYCLICALS (14.5%) Bed Bath & Beyond* 80,100 2,984 Coach* 19,300 842 Deere 47,000 3,088 eBay* 30,000 2,664 Home Depot 87,000 3,125 Lowe's 56,500 3,027 Marriott International 46,000 2,269 Target 106,500 4,760 Wal-Mart Stores 128,881 7,182 Walt Disney 189,500 4,448 --------- 34,389 --------- CONSUMER STAPLES (11.9%) Anheuser-Busch 22,000 1,172 Gillette 110,000 4,740 Kimberly-Clark 47,000 3,097 PepsiCo 115,000 6,138 Procter & Gamble 70,000 7,547 Starbucks* 79,800 3,243 Sysco 62,000 2,325 --------- 28,262 --------- ENERGY (5.9%) Apache 87,750 3,542 ChevronTexaco 17,000 1,537 Exxon Mobil 140,000 6,055 Schlumberger 52,800 3,018 --------- 14,152 --------- FINANCE (18.0%) Aflac 166,000 6,740 AMBAC Financial Group 27,000 1,867 American Express 43,180 2,189 American International Group 81,977 6,009 Citigroup 115,946 5,383 Fannie Mae 25,121 1,701 -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- FINANCE -- CONTINUED Goldman Sachs Group 31,000 $ 2,911 Legg Mason 28,000 2,456 MBNA 185,700 4,717 MGIC Investment 48,500 3,540 Progressive 7,100 609 State Street 99,700 4,827 --------- 42,949 --------- HEALTH CARE (17.0%) Biomet 149,600 6,002 Boston Scientific* 55,000 2,436 Health Management Associates, Cl A (D) 85,000 1,869 Johnson & Johnson 166,732 9,289 Medtronic 82,063 3,931 Pfizer 300,093 10,605 UnitedHealth Group 98,100 6,401 --------- 40,533 --------- TECHNOLOGY (19.3%) Analog Devices 30,500 1,499 Applied Materials* 170,606 3,405 Apple Computer* 87,300 2,450 CDW 46,000 3,232 Cisco Systems* 250,179 5,541 Dell* 68,000 2,392 EMC* 172,100 1,934 First Data 95,000 4,113 Intel 172,086 4,913 International Business Machines 10,985 973 Lexmark International* 33,000 3,113 Microsoft 283,056 7,459 Oracle* 300,808 3,405 Veritas Software* 35,000 931 Xilinx* 16,000 583 --------- 45,943 --------- Total Common Stock (Cost $177,805) 233,812 --------- 99 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 TAX SENSITIVE GROWTH STOCK FUND--CONCLUDED -------------------------------------------------------------------------------- FACE AMOUNT (000)/SHARES VALUE (000) -------------------------------------------------------------------------------- REPURCHASE AGREEMENT (1.5%) BNP Paribas 0.980%, dated 05/28/04, to be repurchased on 06/01/04, repurchase price $3,503,967 (collateralized by FNMA obligations; total market value $3,573,960) (C) $3,504 $ 3,504 --------- Total Repurchase Agreement (Cost $3,504) 3,504 --------- CASH EQUIVALENT (0.8%) Boston Global Investment Trust -- Enhanced Portfolio (A) 1,867,500 1,868 --------- Total Cash Equivalent (Cost $1,868) 1,868 --------- Total Investments (100.5%) (Cost $183,177) 239,184 --------- OTHER ASSETS AND LIABILITIES (-0.5%) Payable Upon Return of Securities Loaned (1,868) Investment Advisory Fees Payable (231) Distribution Fees Payable (71) Administration Fees Payable (14) Custodian Fees Payable (1) Transfer Agent Shareholder Servicing Fees Payable (1) Receivable from Affiliated Funds 1 Other Assets and Liabilities, Net 1,064 --------- Total Other Assets and Liabilities (1,121) --------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 6,208,460 outstanding shares of beneficial interest $ 237,524 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 15,675 outstanding shares of beneficial interest 343 Paid in Capital -- L Shares (unlimited authorization -- no par value) based on 4,218,767 outstanding shares of beneficial interest 184,555 Accumulated net investment loss (1,149) Accumulated net realized loss on investments (239,217) Net unrealized appreciation on investments 56,007 --------- Total Net Assets (100.0%) $ 238,063 ========= Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($144,732,408 / 6,208,460 shares) $23.31 ========= Net Asset Value and Redemption Price Per Share -- A Shares ($364,596 / 15,675 shares) $23.26 ========= Maximum Offering Price Per Share -- A Shares ($23.26 / 96.25%) $24.17 ========= Net Asset Value and Offering Price Per Share -- L Shares (1) ($92,966,192 / 4,218,767 shares) $22.04 ========= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 100 -------------------------------------------------------------------------------- VALUE INCOME STOCK FUND -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- COMMON STOCK (97.5%) BASIC MATERIALS (8.6%) Air Products & Chemicals 203,500 $ 10,169 Alcoa 272,300 8,523 Bemis 177,000 4,876 Boise Cascade 121,500 4,271 E.I. du Pont de Nemours 307,600 13,288 International Paper 355,500 14,906 PPG Industries 143,400 8,575 Rohm & Haas 212,600 8,194 --------- 72,802 --------- CAPITAL GOODS (12.7%) American Power Conversion 357,800 6,476 Emerson Electric 209,400 12,501 General Electric 540,900 16,833 Honeywell International 410,900 13,847 Lockheed Martin 291,000 14,416 Masco 397,600 11,510 Parker Hannifin 154,800 8,601 Pitney Bowes 189,500 8,401 Rockwell Automation 127,365 4,313 Rockwell Collins 130,000 3,905 Teleflex 140,700 6,538 --------- 107,341 --------- COMMUNICATION SERVICES (6.1%) Alltel 174,600 8,840 CenturyTel 411,800 12,309 Harris 134,100 6,201 SBC Communications 351,500 8,330 Verizon Communications 456,010 15,769 --------- 51,449 --------- CONSUMER CYCLICALS (9.6%) Gannett 133,700 11,739 Genuine Parts 112,650 4,240 Leggett & Platt 402,600 10,178 Mattel 456,000 7,971 May Department Stores (D) 264,000 7,566 McGraw-Hill 118,200 9,210 Outback Steakhouse 100,250 4,256 Pier 1 Imports 338,300 6,377 Viacom 336,700 12,421 Walt Disney 305,800 7,177 --------- 81,135 --------- CONSUMER STAPLES (9.6%) Clorox 229,500 12,017 Colgate-Palmolive 229,500 13,127 Dollar General 469,600 9,110 General Mills 280,100 12,899 -------------------------------------------------------------------------------- SHARES VALUE (000) -------------------------------------------------------------------------------- CONSUMER STAPLES -- CONTINUED HJ Heinz 227,500 $ 8,495 Kimberly-Clark 129,000 8,501 PepsiCo 170,100 9,078 Wal-Mart Stores 152,500 8,499 --------- 81,726 --------- ENERGY (6.0%) Baker Hughes 118,600 4,036 BP ADR 236,200 12,518 Exxon Mobil 403,500 17,451 GlobalSantaFe 151,200 3,800 Royal Dutch Petroleum 254,600 12,753 --------- 50,558 --------- FINANCE (27.1%) AG Edwards (D) 238,200 8,909 Allstate 201,900 8,880 American Express 170,800 8,660 American International Group 116,704 8,554 Bank of America 266,300 22,137 Bank of New York 291,700 8,771 Bank One 163,800 7,936 Citigroup 343,900 15,967 Hartford Financial Services Group 95,700 6,328 Keycorp 261,600 8,217 Lehman Brothers Holdings 185,300 14,018 Marsh & McLennan 193,200 8,524 Mellon Financial 427,700 12,591 Merrill Lynch 207,000 11,758 Metlife 243,600 8,660 National City 251,200 8,915 Nationwide Financial Services, Cl A 270,100 9,872 Regions Financial 344,700 13,105 Safeco 194,200 8,147 US Bancorp 305,700 8,590 Wachovia 178,500 8,427 Wells Fargo 214,000 12,583 --------- 229,549 --------- HEALTH CARE (7.3%) Abbott Laboratories 305,000 12,569 Health Management Associates, Cl A (D) 421,400 9,267 Johnson & Johnson 243,800 13,582 Pfizer 422,950 14,947 Wyeth 327,300 11,783 --------- 62,148 --------- 101 STATEMENT OF NET ASSETS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 VALUE INCOME STOCK FUND--CONCLUDED -------------------------------------------------------------------------------- SHARES/FACE AMOUNT (000) VALUE (000) -------------------------------------------------------------------------------- SERVICES (1.2%) Cintas 215,900 $ 9,798 --------- TECHNOLOGY (6.3%) Automatic Data Processing 194,400 8,637 Diebold 129,800 6,377 Hewlett-Packard 402,700 8,553 Intersil, Cl A 324,600 6,898 Koninklijke Philips Electronics 149,400 4,086 Microsoft 332,600 8,764 Motorola 228,400 4,516 Nokia ADR 433,800 5,961 --------- 53,792 --------- TRANSPORTATION (1.0%) Norfolk Southern 356,350 8,634 --------- UTILITIES (2.0%) FPL Group 133,200 8,491 Progress Energy (D) 189,100 8,058 --------- 16,549 --------- Total Common Stock (Cost $720,319) 825,481 --------- CASH EQUIVALENT (2.2%) Boston Global Investment Trust -- Enhanced Portfolio (A) 18,150,400 18,150 --------- Total Cash Equivalent (Cost $18,150) 18,150 --------- REPURCHASE AGREEMENTS (1.9%) Merrill Lynch 1.020%, dated 05/28/04, to be repurchased on 06/01/04, repurchase price $8,874,862 (collateralized by FNMA obligations; total market value $9,052,365) (C) $8,874 8,874 ABN Amro 0.980%, dated 05/28/04, to be repurchased on 06/01/04, repurchase price $7,288,071 (collateralized by U.S. Treasury obligations; total market value $7,433,594) (C) 7,288 7,288 --------- Total Repurchase Agreements (Cost $16,162) 16,162 --------- Total Investments (101.6%) (Cost $754,631) 859,793 --------- -------------------------------------------------------------------------------- VALUE (000) -------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES (-1.6%) Payable Upon Return of Securities Loaned $ (18,150) Investment Advisory Fees Payable (565) Distribution Fees Payable (66) Administration Fees Payable (49) Custodian Fees Payable (4) Transfer Agent Shareholder Servicing Fees Payable (4) Trustees' Fees Payable (1) Receivable from Affiliated Funds 2 Other Assets and Liabilities, Net 5,632 --------- Total Other Assets and Liabilities (13,205) --------- NET ASSETS: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 62,442,743 outstanding shares of beneficial interest 752,638 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 6,409,502 outstanding shares of beneficial interest 83,491 Paid in Capital -- L Shares (unlimited authorization -- no par value) based on 5,077,469 outstanding shares of beneficial interest 95,353 Undistributed net investment income 2,012 Accumulated net realized loss on investments (192,068) Net unrealized appreciation on investments 105,162 --------- Total Net Assets (100.0%) $ 846,588 ========= Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($715,928,444 / 62,442,743 shares) $11.47 ========= Net Asset Value and Redemption Price Per Share -- A Shares ($73,256,960 / 6,409,502 shares) $11.43 ========= Maximum Offering Price Per Share -- A Shares ($11.43 / 96.25%) $11.88 ========= Net Asset Value and Offering Price Per Share -- L Shares (1) ($57,402,541 / 5,077,469 shares) $11.31 ========= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103. 102 -------------------------------------------------------------------------------- KEY TO ABBREVIATIONS AND FOOTNOTES USED IN THE STATEMENTS OF NET ASSETS AND SCHEDULE OF INVESTMENTS ADR American Depositary Receipt Cl Class FHLB Federal Home Loan Bank FHLMC Federal Home Loan Mortgage Corporation FNMA Federal National Mortgage Association GNMA Government National Mortgage Association LP Limited Partnership Ltd. Limited MTN Medium Term Note PLC Public Limited Company REIT Real Estate Investment Trust Ser Series SPDR Standard & Poor's Depository Receipt * Non-income producing security + All investments in the Fund are affiliated. (A) This security was purchased with cash collateral held from securities lending (see Note 8 in Notes to Financial Statements). (B) Securities fair valued using methods determined in good faith according to procedures adopted by the Fair Value Committee of the Board of Trustees. The total value of the securities were 0.02%, 0.26% and 0.50% of net assets for the International Equity, International Equity Index and the Small Cap Growth Stock Funds, respectively. (C) Tri-Party Repurchase Agreement (D) This security or a partial position of the security was on loan at May 31, 2004 (see Note 8 in Notes to Financial Statements). The total value of securities on loan at May 31, 2004 was $2,167,170, $21,795, $248,641, $49,021,854, $66,884,599, $4,525,890, $30,385,324, $322,037,353, $73,404,089, $1,825,170 and $17,660,515 for the Capital Appreciation Fund, Growth and Income Fund, Information and Technology Fund, International Equity Fund, International Equity Index Fund, Mid-Cap Equity Fund, Mid-Cap Value Equity Fund, Small Cap Growth Stock Fund, Small Cap Value Equity Fund, Tax Sensitive Growth Stock Fund and Value Income Stock Fund, respectively. (E) Security considered illiquid. The total value of the security was 0.02%, 0.26% and 0.41% of net assets for the International Equity, International Equity Index and Small Cap Growth Stock Funds, respectively. (F) Security considered restricted (not readily marketable). See Note 2 in Notes to Financial Statement. (1) The L Shares and B Shares have a contingent deferred sales charge. For a description of a possible sales charge, see Note 2 in Notes to Financial Statements. Amounts designated as "--" are either $0 or have been rounded to $0. 103 This page left intentionally blank. STATEMENT OF ASSETS AND LIABILITIES (000) -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004
STRATEGIC QUANTITATIVE EQUITY FUND ------------ Assets: Investments at Market Value (Cost $65,884) .............................................................. $68,988 Receivable for Investment Securities Sold ............................................................... 28,424 Accrued Income .......................................................................................... 61 Receivable for Paid in Capital Shares Purchased ......................................................... 50 Receivable from Adviser ................................................................................. 21 Prepaid Offering Costs .................................................................................. 5 Distribution Fees Receivable ............................................................................ 1 ------- Total Assets ............................................................................................ 97,550 ------- Liabilities: Payable for Investment Securities Purchased ............................................................. 28,315 Payable for Paid in Capital Shares Redeemed ............................................................. 605 Investment Advisory Fees Payable ........................................................................ 55 Payable to Affiliated Funds ............................................................................. 22 Administration Fees Payable ............................................................................. 4 Accrued Expenses ........................................................................................ 9 ------- Total Liabilities ....................................................................................... 29,010 ------- Total Net Assets ........................................................................................ $68,540 ======= Net Assets: Paid in Capital -- T Shares (unlimited authorization -- no par value) based on 5,528,500 outstanding shares of beneficial interest .......................................... $60,854 Paid in Capital -- A Shares (unlimited authorization -- no par value) based on 12,882 outstanding shares of beneficial interest ............................................. 154 Paid in Capital-- L Shares (unlimited authorization -- no par value) based on 131,151 outstanding shares of beneficial interest ............................................ 1,539 Accumulated net investment loss ......................................................................... (18) Accumulated net realized gain on investments ............................................................ 2,907 Net unrealized appreciation on investments .............................................................. 3,104 ------- Total Net Assets ........................................................................................ $68,540 ======= Net Asset Value, Offering and Redemption Price Per Share -- T Shares ($66,811,403 / 5,528,500 shares) ........................................................................ $12.08 ======= Net Asset Value and Redemption Price Per Share -- A Shares ($155,282 / 12,882 shares) .............................................................................. $12.05 ======= Maximum Offering Price Per Share -- A Shares ($12.05 / 96.25%) .............................................................................. $12.52 ======= Net Asset Value and Offering Price Per Share -- L Shares (1) ($1,573,339 / 131,151 shares) ........................................................................... $12.00 ======= (1) The L Shares have a contingent deferred sales charge. For a description of a possible sales charge, see Note 2 in Notes to Financial Statements.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 105 STATEMENTS OF OPERATIONS (000) -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS FOR THE YEAR OR PERIOD ENDED MAY 31, 2004
AGGRESSIVE CAPITAL GROWTH STOCK BALANCED APPRECIATION FUND(1) FUND FUND ------------ -------- ------------ Income: Dividend Income* ............................................... $ 10 $ 1,484 $ 13,459 Interest Income ................................................ 4 6,593 356 Security Lending Income ........................................ -- 107 185 Less: Foreign Taxes Withheld ................................... -- -- -- ---- -------- -------- Total Income ................................................... 14 8,184 14,000 ---- -------- -------- Expenses: Investment Advisory Fees ....................................... 36 3,091 16,536 Administration Fees ............................................ 2 223 986 Distribution Fees -- A Shares .................................. -- 25 990 Distribution Fees -- L Shares .................................. -- 713 1,030 Distribution Fees -- B Shares .................................. -- -- -- Custodian Fees ................................................. -- 12 39 Transfer Agent Shareholder Servicing Fees ...................... -- 9 38 Trustees' Fees ................................................. -- 3 15 Transfer Agent Fees -- T Shares ................................ 1 16 16 Transfer Agent Fees -- A Shares ................................ 1 19 109 Transfer Agent Fees -- L Shares ................................ 1 95 192 Transfer Agent Fees -- B Shares ................................ -- -- -- Professional Fees .............................................. -- 13 61 Printing Fees .................................................. -- 11 48 Transfer Agent Out of Pocket Fees .............................. -- 11 48 Registration Fees .............................................. -- 10 40 Offering Costs ................................................. 7 -- -- Other Fees ..................................................... -- 9 41 ---- -------- -------- Total Expenses ................................................. 48 4,260 20,189 ---- -------- -------- Less: Investment Advisory Fees Waived ........................ (10) (91) (284) Less: Fees Reimbursed by Distributor ......................... (1) -- -- Less: Distribution Fees Waived/Reimbursed -- A Shares ........ (1) (15) (140) Less: Distribution Fees Waived -- L Shares ................... (1) (41) (60) Less: Distribution Fees Waived -- B Shares ................... -- -- -- ---- -------- -------- Net Expenses ................................................... 35 4,113 19,705 ---- -------- -------- Net Investment Income (Loss) ................................... (21) 4,071 (5,705) ---- -------- -------- Net Realized and Unrealized Gain (Loss) on Investments: Net Realized Gain (Loss) on Securities Sold* ................... (39) 26,469 240,042 Net Realized Gain on Foreign Currency Transactions ............. -- -- -- Net Change in Unrealized Depreciation on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency .............................. -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments* ............................... 389 (17,586) (77,211) ---- -------- -------- Total Net Realized and Unrealized Gain (Loss) on Investments ... 350 8,883 162,831 ---- -------- -------- Net Increase (Decrease) in Net Assets from Operations .......... $329 $ 12,954 $157,126 ==== ======== ======== * Dividend income, net realized gain on securities sold and net change in unrealized appreciation on investments for the Life Vision Funds are attributable to the underlying investments in affiliated investment companies. (1) The Aggressive Growth Stock Fund and the Emerging Growth Stock Fund commenced operations on February 23, 2004. Amounts designated as "--" are either $0 or have been rounded to $0.
106 --------------------------------------------------------------------------------
EMERGING GROWTH AND INFORMATION AND GROWTH STOCK INCOME TECHNOLOGY FUND(1) FUND FUND ------------ ---------- --------------- Income: Dividend Income* ............................................... $ 2 $ 17,050 $ 35 Interest Income ................................................ 2 106 7 Security Lending Income ........................................ -- 83 48 Less: Foreign Taxes Withheld ................................... -- (38) (1) ----- -------- ------ Total Income ................................................... 4 17,201 89 ----- -------- ------ Expenses: Investment Advisory Fees ....................................... 28 7,647 205 Administration Fees ............................................ 2 582 13 Distribution Fees -- A Shares .................................. -- 105 -- Distribution Fees -- L Shares .................................. -- 910 76 Distribution Fees -- B Shares .................................. -- -- -- Custodian Fees ................................................. -- 23 4 Transfer Agent Shareholder Servicing Fees ...................... -- 23 -- Trustees' Fees ................................................. -- 9 -- Transfer Agent Fees -- T Shares ................................ 1 16 16 Transfer Agent Fees -- A Shares ................................ 1 48 5 Transfer Agent Fees -- L Shares ................................ 1 160 49 Transfer Agent Fees -- B Shares ................................ -- -- -- Professional Fees .............................................. -- 38 1 Printing Fees .................................................. -- 30 1 Transfer Agent Out of Pocket Fees .............................. -- 28 1 Registration Fees .............................................. -- 21 1 Offering Costs ................................................. 7 -- -- Other Fees ..................................................... -- 29 1 ----- -------- ------ Total Expenses ................................................. 40 9,669 373 ----- -------- ------ Less: Investment Advisory Fees Waived ........................ (9) -- -- Less: Fees Reimbursed by Distributor ......................... (1) -- -- Less: Distribution Fees Waived/Reimbursed -- A Shares ........ (1) (74) (5) Less: Distribution Fees Waived -- L Shares ................... (1) (217) (46) Less: Distribution Fees Waived -- B Shares -- -- -- ----- -------- ------ Net Expenses ................................................... 28 9,378 322 ----- -------- ------ Net Investment Income (Loss) ................................... (24) 7,823 (233) ----- -------- ------ Net Realized and Unrealized Gain (Loss) on Investments: Net Realized Gain (Loss) on Securities Sold* ................... (178) 54,492 4,946 Net Realized Gain on Foreign Currency Transactions ............. -- -- -- Net Change in Unrealized Depreciation on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency .............................. -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments* ............................... (39) 99,001 (901) ----- -------- ------ Total Net Realized and Unrealized Gain (Loss) on Investments ... (217) 153,493 4,045 ----- -------- ------ Net Increase (Decrease) in Net Assets from Operations .......... $(241) $161,316 $3,812 ===== ======== ======
INTERNATIONAL INTERNATIONAL LIFE VISION EQUITY EQUITY AGGRESSIVE GROWTH FUND INDEX FUND FUND ------------ ------------- ----------------- Income: Dividend Income* ............................................... $ 7,134 $ 8,397 $ 242 Interest Income ................................................ 2 -- -- Security Lending Income ........................................ 128 187 -- Less: Foreign Taxes Withheld ................................... (787) (921) -- ------- ------- ------ Total Income ................................................... 6,477 7,663 242 ------- ------- ------ Expenses: Investment Advisory Fees ....................................... 3,256 2,929 95 Administration Fees ............................................ 179 223 26 Distribution Fees -- A Shares .................................. 24 56 1 Distribution Fees -- L Shares .................................. 70 43 -- Distribution Fees -- B Shares .................................. -- -- 30 Custodian Fees ................................................. 165 207 1 Transfer Agent Shareholder Servicing Fees ...................... 7 9 1 Trustees' Fees ................................................. 3 3 -- Transfer Agent Fees -- T Shares ................................ 16 16 16 Transfer Agent Fees -- A Shares ................................ 23 25 5 Transfer Agent Fees -- L Shares ................................ 31 21 -- Transfer Agent Fees -- B Shares ................................ -- -- 18 Professional Fees .............................................. 12 15 2 Printing Fees .................................................. 9 11 1 Transfer Agent Out of Pocket Fees .............................. 9 11 1 Registration Fees .............................................. 5 8 1 Offering Costs ................................................. -- -- -- Other Fees ..................................................... 17 33 -- ------- ------- ------ Total Expenses ................................................. 3,826 3,610 198 ------- ------- ------ Less: Investment Advisory Fees Waived ........................ -- (278) (51) Less: Fees Reimbursed by Distributor ......................... -- -- -- Less: Distribution Fees Waived/Reimbursed -- A Shares ........ (16) (5) (5) Less: Distribution Fees Waived -- L Shares ................... (23) (14) -- Less: Distribution Fees Waived -- B Shares ................... -- -- (24) ------- ------- ------ Net Expenses ................................................... 3,787 3,313 118 ------- ------- ------ Net Investment Income (Loss) ................................... 2,690 4,350 124 ------- ------- ------ Net Realized and Unrealized Gain (Loss) on Investments: Net Realized Gain (Loss) on Securities Sold* ................... 12,338 3,091 325 Net Realized Gain on Foreign Currency Transactions ............. 334 480 -- Net Change in Unrealized Depreciation on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency .............................. (192) (40) -- Net Change in Unrealized Appreciation (Depreciation) on Investments* ............................... 42,284 82,047 6,169 ------- ------- ------ Total Net Realized and Unrealized Gain (Loss) on Investments ... 54,764 85,578 6,494 ------- ------- ------ Net Increase (Decrease) in Net Assets from Operations .......... $57,454 $89,928 $6,618 ======= ======= ======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 107 STATEMENTS OF OPERATIONS (000) -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS FOR THE YEAR OR PERIOD ENDED MAY 31, 2004
LIFE VISION LIFE VISION LIFE VISION CONSERVATIVE GROWTH AND INCOME MODERATE FUND FUND GROWTH FUND ------------ ------------------ ------------ Income: Dividend Income* ............................................... $ 97 $ 1,312 $ 2,283 Interest Income ................................................ -- -- -- Security Lending Income ........................................ -- -- -- Less: Foreign Tax Withheld ..................................... -- -- -- ---- ------- ------- Total Income ................................................... 97 1,312 2,283 ---- ------- ------- Expenses: Investment Advisory Fees ....................................... 10 201 301 Administration Fees ............................................ 3 55 83 Distribution Fees -- A Shares .................................. 1 2 6 Distribution Fees -- L Shares .................................. -- -- -- Distribution Fees -- B Shares .................................. 37 78 95 Custodian Fees ................................................. -- 2 3 Transfer Agent Shareholder Servicing Fees ...................... -- 2 3 Trustees' Fees ................................................. -- 1 1 Transfer Agent Fees -- T Shares ................................ 7 16 16 Transfer Agent Fees -- A Shares ................................ 5 5 5 Transfer Agent Fees -- L Shares ................................ -- -- -- Transfer Agent Fees -- B Shares ................................ 17 21 21 Professional Fees .............................................. -- 4 5 Printing Fees .................................................. -- 3 4 Transfer Agent Out of Pocket Fees .............................. -- 3 4 Registration Fees .............................................. -- 2 3 Offering Costs ................................................. -- -- -- Other Fees ..................................................... -- 1 4 ---- ------- ------- Total Expenses ................................................. 80 396 554 ---- ------- ------- Less: Investment Advisory Fees Waived ........................ (6) (90) (128) Less: Fees Reimbursed by Distributor ......................... (7) -- -- Less: Distribution Fees Waived/Reimbursed -- A Shares ........ (5) (6) (7) Less: Distribution Fees Waived -- L Shares ................... -- -- -- Less: Distribution Fees Waived -- B Shares ................... (26) (39) (43) ---- ------- ------- Net Expenses ................................................... 36 261 376 ---- ------- ------- Net Investment Income (Loss) ................................... 61 1,051 1,907 ---- ------- ------- Net Realized and Unrealized Gain (Loss) on Investments: Capital Gain from Investments in Affiliated Investment Companies* ........................................ 1 8 12 Net Realized Gain on Securities Sold* .......................... 9 2,565 2,529 Net Change in Unrealized Appreciation on Investments* .............................................. 95 8,207 9,804 ---- ------- ------- Total Net Realized and Unrealized Gain on Investments .......... 105 10,780 12,345 ---- ------- ------- Net Increase in Net Assets from Operations ..................... $166 $11,831 $14,252 ==== ======= ======= * Dividend income, capital gain from investments in affiliated investment companies, net realized gain on securities sold and net change in unrealized appreciation on investments for the Life Vision Funds are attributable to the underlying investments in affiliated investment companies. (1) The Strategic Quantitative Equity Fund commenced operations on August 7, 2003. Amounts designated as "--" are either $0 or have been rounded to $0.
108 --------------------------------------------------------------------------------
MID-CAP MID-CAP SMALL CAP EQUITY VALUE EQUITY GROWTH STOCK FUND FUND FUND ------- ------------ ------------- Income: Dividend Income* ............................................... $ 3,381 $ 2,263 $ 2,490 Interest Income ................................................ 56 92 95 Security Lending Income ........................................ 142 74 826 Less: Foreign Tax Withheld ..................................... -- (10) (13) ------- ------- -------- Total Income ................................................... 3,579 2,419 3,398 ------- ------- -------- Expenses: Investment Advisory Fees ....................................... 2,201 1,691 9,361 Administration Fees ............................................ 131 93 558 Distribution Fees -- A Shares .................................. 63 1 157 Distribution Fees -- L Shares .................................. 153 73 370 Distribution Fees -- B Shares .................................. -- -- -- Custodian Fees ................................................. 14 8 70 Transfer Agent Shareholder Servicing Fees ...................... 5 4 22 Trustees' Fees ................................................. 2 1 8 Transfer Agent Fees -- T Shares ................................ 16 16 21 Transfer Agent Fees -- A Shares ................................ 29 5 41 Transfer Agent Fees -- L Shares ................................ 45 29 56 Transfer Agent Fees -- B Shares ................................ -- -- -- Professional Fees .............................................. 9 6 36 Printing Fees .................................................. 7 5 30 Transfer Agent Out of Pocket Fees .............................. 6 5 27 Registration Fees .............................................. 4 3 19 Offering Costs ................................................. -- -- -- Other Fees ..................................................... 4 4 25 ------- ------- -------- Total Expenses ................................................. 2,689 1,944 10,801 ------- ------- -------- Less: Investment Advisory Fees Waived ........................ (48) (135) -- Less: Fees Reimbursed by Distributor ......................... -- -- -- Less: Distribution Fees Waived/Reimbursed -- A Shares ........ (25) (5) (85) Less: Distribution Fees Waived -- L Shares ................... (36) (54) (33) Less: Distribution Fees Waived -- B Shares ................... -- -- -- ------- ------- -------- Net Expenses ................................................... 2,580 1,750 10,683 ------- ------- -------- Net Investment Income (Loss) ................................... 999 669 (7,285) ------- ------- -------- Net Realized and Unrealized Gain (Loss) on Investments: Capital Gain from Investments in Affiliated Investment Companies* ........................................ -- -- -- Net Realized Gain on Securities Sold* .......................... 22,721 18,863 145,086 Net Change in Unrealized Appreciation on Investments* .............................................. 6,629 12,849 80,171 ------- ------- -------- Total Net Realized and Unrealized Gain on Investments .......... 29,350 31,712 225,257 ------- ------- -------- Net Increase in Net Assets from Operations ..................... $30,349 $32,381 $217,972 ======= ======= ========
SMALL CAP STRATEGIC TAX SENSITIVE VALUE VALUE EQUITY QUANTITATIVE GROWTH STOCK INCOME STOCK FUND EQUITY FUND(1) FUND FUND --------- ------------- ------------ ---------- Income: Dividend Income* ............................................... $ 10,408 $ 335 $ 2,605 $ 18,485 Interest Income ................................................ 216 6 36 383 Security Lending Income ........................................ 428 -- 37 85 Less: Foreign Tax Withheld ..................................... (215) -- -- (127) -------- ------ ------- -------- Total Income ................................................... 10,837 341 2,678 18,826 -------- ------ ------- -------- Expenses: Investment Advisory Fees ....................................... 7,677 432 3,168 6,572 Administration Fees ............................................ 458 26 189 563 Distribution Fees -- A Shares .................................. 4 -- 1 235 Distribution Fees -- L Shares .................................. 434 7 1,054 561 Distribution Fees -- B Shares .................................. -- -- -- -- Custodian Fees ................................................. 39 1 7 22 Transfer Agent Shareholder Servicing Fees ...................... 18 1 7 22 Trustees' Fees ................................................. 7 -- 3 9 Transfer Agent Fees -- T Shares ................................ 16 11 16 16 Transfer Agent Fees -- A Shares ................................ 6 5 5 64 Transfer Agent Fees -- L Shares ................................ 86 5 171 97 Transfer Agent Fees -- B Shares ................................ -- -- -- -- Professional Fees .............................................. 30 2 10 34 Printing Fees .................................................. 23 2 8 27 Transfer Agent Out of Pocket Fees .............................. 23 1 9 27 Registration Fees .............................................. 16 -- 10 24 Offering Costs ................................................. -- 23 -- -- Other Fees ..................................................... 21 1 8 30 -------- ------ ------- -------- Total Expenses ................................................. 8,858 517 4,666 8,303 -------- ------ ------- -------- Less: Investment Advisory Fees Waived ........................ -- (77) -- -- Less: Fees Reimbursed by Distributor ......................... -- -- -- -- Less: Distribution Fees Waived/Reimbursed -- A Shares ........ (7) (5) (5) (23) Less: Distribution Fees Waived -- L Shares ................... (81) (4) (98) (25) Less: Distribution Fees Waived -- B Shares ................... -- -- -- -- -------- ------ ------- -------- Net Expenses ................................................... 8,770 431 4,563 8,255 -------- ------ ------- -------- Net Investment Income (Loss) ................................... 2,067 (90) (1,885) 10,571 -------- ------ ------- -------- Net Realized and Unrealized Gain (Loss) on Investments: Capital Gain from Investments in Affiliated Investment Companies* ........................................ -- -- -- -- Net Realized Gain on Securities Sold* .......................... 66,912 3,973 31,183 71,412 Net Change in Unrealized Appreciation on Investments* .............................................. 113,873 3,104 2,584 62,760 -------- ------ ------- -------- Total Net Realized and Unrealized Gain on Investments .......... 180,785 7,077 33,767 134,172 -------- ------ ------- -------- Net Increase in Net Assets from Operations ..................... $182,852 $6,987 $31,882 $144,743 ======== ====== ======= ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 109 STATEMENTS OF CHANGES IN NET ASSETS (000) -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31,
AGGRESSIVE GROWTH STOCK FUND BALANCED FUND ----------------- ----------------------- 02/23/04*- 06/01/03- 06/01/02- 05/31/04 05/31/04 05/31/03 ---------- --------- --------- Operations: Net Investment Income (Loss) ...................................... $ (21) $ 4,071 $ 4,261 Net Realized Gain (Loss) on Securities Sold ....................... (39) 26,469 (22,027) Net Change in Unrealized Appreciation (Depreciation) on Investments .................................................. 389 (17,586) 14,697 ------- -------- -------- Net Increase(Decrease) in Net Assets from Operations .............. 329 12,954 (3,069) ------- -------- -------- Dividends to Shareholders: Net Investment Income: T Shares ........................................................ -- (3,826) (4,267) A Shares ........................................................ -- (114) (136) L Shares ........................................................ -- (403) (618) ------- -------- -------- Total Dividends ................................................... -- (4,343) (5,021) ------- -------- -------- Capital Transactions (1): T Shares: Proceeds from Shares Issued ..................................... 20,288 70,058 64,673 Reinvestment of Cash Distributions .............................. -- 3,612 4,061 Cost of Shares Repurchased ...................................... (115) (64,462) (75,973) ------- -------- -------- Increase (Decrease) in Net Assets From T Share Transactions ....... 20,173 9,208 (7,239) ------- -------- -------- A Shares (2): Proceeds from Shares Issued ..................................... 48 2,139 1,079 Reinvestment of Cash Distributions .............................. -- 112 134 Cost of Shares Repurchased ...................................... -- (1,862) (1,735) ------- -------- -------- Increase (Decrease) in Net Assets From A Share Transactions ....... 48 389 (522) ------- -------- -------- L Shares (2): Proceeds from Shares Issued ..................................... 72 18,913 16,361 Reinvestment of Cash Distributions .............................. -- 376 584 Cost of Shares Repurchased ...................................... (7) (23,445) (22,271) ------- -------- -------- Increase (Decrease) in Net Assets From L Share Transactions ....... 65 (4,156) (5,326) ------- -------- -------- Increase (Decrease) in Net Assets From Share Transactions ....... 20,286 5,441 (13,087) ------- -------- -------- Total Increase (Decrease) in Net Assets ....................... 20,615 14,052 (21,177) ------- -------- -------- Net Assets: Beginning of Period ............................................. -- 304,327 325,504 ------- -------- -------- End of Period ................................................... $20,615 $318,379 $304,327 ======= ======== ======== Undistributed Net Investment Income (Accumulated Net Investment Loss) $ (5) $ 893 $ 863 ======= ======== ======== * Commencement of Operations. (1) See Note 5 in Notes to Financial Statements for additional information. (2) A Shares were offered beginning on October 27, 2003 for the Information and Technology Fund. L Shares were offered beginning on February 27, 2004 for the Emerging Growth Stock Fund. Amounts designated as "--" are either $0 or have been rounded to $0.
110 --------------------------------------------------------------------------------
CAPITAL EMERGING GROWTH APPRECIATION FUND STOCK FUND -------------------------- --------------------- 06/01/03- 06/01/02- 02/23/04*- 05/31/04 05/31/03 05/31/04 --------- --------- ---------- Operations: Net Investment Income (Loss) ...................................... $ (5,705) $ (5,958) $ (24) Net Realized Gain (Loss) on Securities Sold ....................... 240,042 (191,580) (178) Net Change in Unrealized Appreciation (Depreciation) on Investments .................................................. (77,211) 47,666 (39) ---------- ---------- ------- Net Increase(Decrease) in Net Assets from Operations .............. 157,126 (149,872) (241) ---------- ---------- ------- Dividends to Shareholders: Net Investment Income: T Shares ........................................................ -- -- -- A Shares ........................................................ -- -- -- L Shares ........................................................ -- -- -- ---------- ---------- ------- Total Dividends ................................................... -- -- -- ---------- ---------- ------- Capital Transactions (1): T Shares: Proceeds from Shares Issued ..................................... 279,768 243,462 13,349 Reinvestment of Cash Distributions .............................. -- -- -- Cost of Shares Repurchased ...................................... (253,060) (237,698) (221) ---------- ---------- ------- Increase (Decrease) in Net Assets From T Share Transactions ....... 26,708 5,764 13,128 ---------- ---------- ------- A Shares (2): Proceeds from Shares Issued ..................................... 15,738 23,224 40 Reinvestment of Cash Distributions .............................. -- -- -- Cost of Shares Repurchased ...................................... (26,645) (27,320) -- ---------- ---------- ------- Increase (Decrease) in Net Assets From A Share Transactions ....... (10,907) (4,096) 40 ---------- ---------- ------- L Shares (2): Proceeds from Shares Issued ..................................... 21,720 22,663 44 Reinvestment of Cash Distributions .............................. -- -- -- Cost of Shares Repurchased ...................................... (26,198) (26,440) (7) ---------- ---------- ------- Increase (Decrease) in Net Assets From L Share Transactions ....... (4,478) (3,777) 37 ---------- ---------- ------- Increase (Decrease) in Net Assets From Share Transactions ....... 11,323 (2,109) 13,205 ---------- ---------- ------- Total Increase (Decrease) in Net Assets ....................... 168,449 (151,981) 12,964 ---------- ---------- ------- Net Assets: Beginning of Period ............................................. 1,326,542 1,478,523 -- ---------- ---------- ------- End of Period ................................................... $1,494,991 $1,326,542 $12,964 ========== ========== ======= Undistributed Net Investment Income (Accumulated Net Investment Loss) $ -- $ -- $ (6) ========== ========== =======
GROWTH AND INFORMATION AND TECHNOLOGY INCOME FUND FUND ---------------------- -------------------------- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 05/31/04 05/31/03 05/31/04 05/31/03 --------- --------- --------- --------- Operations: Net Investment Income (Loss) ...................................... $ 7,823 $ 6,620 $ (233) $ (221) Net Realized Gain (Loss) on Securities Sold ....................... 54,492 (81,525) 4,946 (15,209) Net Change in Unrealized Appreciation (Depreciation) on Investments .................................................. 99,001 (26,671) (901) 4,224 --------- --------- -------- -------- Net Increase(Decrease) in Net Assets from Operations .............. 161,316 (101,576) 3,812 (11,206) --------- --------- -------- -------- Dividends to Shareholders: Net Investment Income: T Shares ........................................................ (6,962) (6,291) -- -- A Shares ........................................................ (336) (270) -- -- L Shares ........................................................ (163) (125) -- -- --------- --------- -------- -------- Total Dividends ................................................... (7,461) (6,686) -- -- --------- --------- -------- -------- Capital Transactions (1): T Shares: Proceeds from Shares Issued ..................................... 187,428 97,378 5,911 3,953 Reinvestment of Cash Distributions .............................. 2,566 2,307 -- -- Cost of Shares Repurchased ...................................... (136,004) (200,850) (10,357) (15,842) --------- --------- -------- -------- Increase (Decrease) in Net Assets From T Share Transactions ....... 53,990 (101,165) (4,446) (11,889) --------- --------- -------- -------- A Shares (2): Proceeds from Shares Issued ..................................... 11,177 12,024 28 -- Reinvestment of Cash Distributions .............................. 304 247 -- -- Cost of Shares Repurchased ...................................... (9,607) (8,883) (26) -- --------- --------- -------- -------- Increase (Decrease) in Net Assets From A Share Transactions ....... 1,874 3,388 2 -- --------- --------- -------- -------- L Shares (2): Proceeds from Shares Issued ..................................... 29,013 16,261 1,309 823 Reinvestment of Cash Distributions .............................. 154 119 -- -- Cost of Shares Repurchased ...................................... (21,942) (24,930) (1,860) (2,373) --------- --------- -------- -------- Increase (Decrease) in Net Assets From L Share Transactions ....... 7,225 (8,550) (551) (1,550) --------- --------- -------- -------- Increase (Decrease) in Net Assets From Share Transactions ....... 63,089 (106,327) (4,995) (13,439) --------- --------- -------- -------- Total Increase (Decrease) in Net Assets ....................... 216,944 (214,589) (1,183) (24,645) --------- --------- -------- -------- Net Assets: Beginning of Period ............................................. 709,428 924,017 18,274 42,919 --------- --------- -------- -------- End of Period ................................................... $ 926,372 $ 709,428 $ 17,091 $ 18,274 ========= ========= ======== ======== Undistributed Net Investment Income (Accumulated Net Investment Loss) $ 1,551 $ 1,189 $ -- $ -- ========= ========= ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 111 STATEMENTS OF CHANGES IN NET ASSETS (000) -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS FOR THE YEARS ENDED MAY 31,
INTERNATIONAL EQUITY INTERNATIONAL EQUITY FUND INDEX FUND ----------------------- ----------------------- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 05/31/04 05/31/03 05/31/04 05/31/03 --------- --------- --------- --------- Operations: Net Investment Income* ............................................ $ 2,690 $ 1,679 $ 4,350 $ 3,085 Capital Gain Received from Investments in Affiliated Investment Companies* ................................ -- -- -- -- Net Realized Gain (Loss) on Securities Sold* ...................... 12,338 (44,637) 3,091 (16,811) Net Realized Gain on Foreign Currency Transactions ................ 334 746 480 484 Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency ............................. (192) 241 (40) 62 Net Change in Unrealized Appreciation (Depreciation) on Investments* ................................................. 42,284 740 82,047 (26,241) -------- --------- -------- -------- Net Increase (Decrease) in Net Assets from Operations ............. 57,454 (41,231) 89,928 (39,421) -------- --------- -------- -------- Dividends and Distributions to Shareholders: Net Investment Income: T Shares ........................................................ (3,390) (1,433) (3,907) (1,078) A Shares ........................................................ (74) (19) (153) (4) L Shares ........................................................ (45) (22) B Shares ........................................................ -- -- -- -- Return of Capital: T Shares ........................................................ -- -- -- -- -------- --------- -------- -------- Total Dividends and Distributions ................................. (3,509) (1,452) (4,082) (1,082) -------- --------- -------- -------- Capital Transactions (1): T Shares (2): Proceeds from Shares Issued ..................................... 144,029 86,628 83,517 62,225 Reinvestment of Cash Distributions .............................. 1,379 611 3,067 835 Cost of Shares Repurchased ...................................... (54,870) (108,037) (64,875) (62,128) -------- --------- -------- -------- Increase (Decrease) in Net Assets from T Share Transactions ....... 90,538 (20,798) 21,709 932 -------- --------- -------- -------- A Shares (2): Proceeds from Shares Issued ..................................... 16,666 14,843 22,245 21,764 Reinvestment of Cash Distributions .............................. 67 18 147 4 Cost of Shares Repurchased ...................................... (17,896) (13,138) (21,325) (15,195) -------- --------- -------- -------- Increase (Decrease) in Net Assets from A Share Transactions ....... (1,163) 1,723 1,067 6,573 -------- --------- -------- -------- L Shares: Proceeds from Shares Issued ..................................... 1,875 6,250 2,143 4,554 Reinvestment of Cash Distributions .............................. 43 -- 20 -- Cost of Shares Repurchased ...................................... (1,523) (6,195) (1,117) (4,487) -------- --------- -------- -------- Increase in Net Assets from L Share Transactions .................. 395 55 1,046 67 -------- --------- -------- -------- B Shares (2): Proceeds from Shares Issued ..................................... -- -- -- -- Reinvestment of Cash Distributions .............................. -- -- -- -- Cost of Shares Repurchased ...................................... -- -- -- -- -------- --------- -------- -------- Increase in Net Assets from B Share Transactions .................. -- -- -- -- -------- --------- -------- -------- Increase (Decrease) in Net Assets from Share Transactions ....... 89,770 (19,020) 23,822 7,572 -------- --------- -------- -------- Total Increase (Decrease) in Net Assets ....................... 143,715 (61,703) 109,668 (32,931) -------- --------- -------- -------- Net Assets: Beginning of Year ............................................. 203,127 264,830 261,740 294,671 -------- --------- -------- -------- End of Year ................................................... $346,842 $ 203,127 $371,408 $261,740 ======== ========= ======== ======== Undistributed Net Investment Income ................................. $ 2,377 $ 2,222 $ 3,035 $ 2,287 ======== ========= ======== ======== * Net investment income, capital gains received from investments in affiliated investment companies, net realized gain (loss) on securities sold and net change in unrealized appreciation (depreciation) on investments and for the Life Vision Funds are attributable to the underlying investments in affiliated investment companies. ** Commencement of Operations. (1) See Note 5 in Notes to Financial Statements for additional information.
112 -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS FOR THE YEARS ENDED MAY 31,
LIFE VISION LIFE VISION AGGRESSIVE GROWTH FUND CONSERVATIVE FUND ------------------------ ---------------------- 06/01/03- 06/01/02- 06/01/03- 03/11/03**- 05/31/04 05/31/03 05/31/04 05/31/03 --------- --------- -------- ---------- Operations: Net Investment Income* ............................................ $ 124 $ 89 $ 61 $ 1 Capital Gain Received from Investments in Affiliated Investment Companies* ................................ -- 30 1 -- Net Realized Gain (Loss) on Securities Sold* ...................... 325 (1,580) 9 -- Net Realized Gain on Foreign Currency Transactions ................ -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency ............................. -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments* ................................................. 6,169 (1,995) 95 18 ------- ------- ------ ---- Net Increase (Decrease) in Net Assets from Operations ............. 6,618 (3,456) 166 19 ------- ------- ------ ---- Dividends and Distributions to Shareholders: Net Investment Income: T Shares ........................................................ (120) (92) -- -- A Shares ........................................................ -- -- (3) -- L Shares ........................................................ -- -- B Shares ........................................................ (4) -- (47) -- Return of Capital: T Shares ........................................................ (12) -- -- -- ------- ------- ------ ---- Total Dividends and Distributions ................................. (136) (92) (50) -- ------- ------- ------ ---- Capital Transactions (1): T Shares (2): Proceeds from Shares Issued ..................................... 8,576 5,003 30 -- Reinvestment of Cash Distributions .............................. 132 91 -- -- Cost of Shares Repurchased ...................................... (4,939) (7,185) -- -- ------- ------- ------ ---- Increase (Decrease) in Net Assets from T Share Transactions ....... 3,769 (2,091) 30 -- ------- ------- ------ ---- A Shares (2): Proceeds from Shares Issued ..................................... 858 -- 485 -- Reinvestment of Cash Distributions .............................. -- -- 2 -- Cost of Shares Repurchased ...................................... -- -- (10) -- ------- ------- ------ ---- Increase (Decrease) in Net Assets from A Share Transactions ....... 858 -- 477 -- ------- ------- ------ ---- L Shares: Proceeds from Shares Issued ..................................... -- -- -- -- Reinvestment of Cash Distributions .............................. -- -- -- -- Cost of Shares Repurchased ...................................... -- -- -- -- ------- ------- ------ ---- Increase in Net Assets from L Share Transactions .................. -- -- -- -- ------- ------- ------ ---- B Shares (2): Proceeds from Shares Issued ..................................... 3,147 975 4,680 811 Reinvestment of Cash Distributions .............................. 4 -- 40 -- Cost of Shares Repurchased ...................................... (291) (1) (627) (30) ------- ------- ------ ---- Increase in Net Assets from B Share Transactions .................. 2,860 974 4,093 781 ------- ------- ------ ---- Increase (Decrease) in Net Assets from Share Transactions ....... 7,487 (1,117) 4,600 781 ------- ------- ------ ---- Total Increase (Decrease) in Net Assets ....................... 13,969 (4,665) 4,716 800 ------- ------- ------ ---- Net Assets: Beginning of Year ............................................. 29,733 34,398 800 -- ------- ------- ------ ---- End of Year ................................................... $43,702 $29,733 $5,516 $800 ======= ======= ====== ==== Undistributed Net Investment Income ................................. $ -- $ -- $ 12 $ 1 ======= ======= ====== ====
LIFE VISION LIFE VISION GROWTH AND INCOME FUND MODERATE GROWTH FUND ---------------------- --------------------- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 05/31/04 05/31/03 05/31/04 05/31/03 --------- --------- --------- --------- Operations: Net Investment Income* ............................................ $ 1,051 $ 928 $ 1,907 $ 1,614 Capital Gain Received from Investments in Affiliated Investment Companies* ................................ 8 73 12 91 Net Realized Gain (Loss) on Securities Sold* ...................... 2,565 (4,254) 2,529 (1,615) Net Realized Gain on Foreign Currency Transactions ................ -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Foreign Currency and Translation of Other Assets and Liabilities in Foreign Currency ............................. -- -- -- -- Net Change in Unrealized Appreciation (Depreciation) on Investments* ................................................. 8,207 (1,727) 9,804 (1,207) -------- -------- -------- -------- Net Increase (Decrease) in Net Assets from Operations ............. 11,831 (4,980) 14,252 (1,117) -------- -------- -------- -------- Dividends and Distributions to Shareholders: Net Investment Income: T Shares ........................................................ (972) (931) (1,737) (1,621) A Shares ........................................................ (5) -- (19) -- L Shares ........................................................ -- -- B Shares ........................................................ (58) -- (90) (1) Return of Capital: T Shares ........................................................ -- -- -- -- -------- -------- -------- -------- Total Dividends and Distributions ................................. (1,035) (931) (1,846) (1,622) -------- -------- -------- -------- Capital Transactions (1): T Shares (2): Proceeds from Shares Issued ..................................... 22,469 19,612 45,870 34,474 Reinvestment of Cash Distributions .............................. 971 927 1,730 1,615 Cost of Shares Repurchased ...................................... (17,771) (32,451) (31,191) (28,076) -------- -------- -------- -------- Increase (Decrease) in Net Assets from T Share Transactions ....... 5,669 (11,912) 16,409 8,013 -------- -------- -------- -------- A Shares (2): Proceeds from Shares Issued ..................................... 1,432 -- 4,397 -- Reinvestment of Cash Distributions .............................. 5 -- 18 -- Cost of Shares Repurchased ...................................... (24) -- (898) -- -------- -------- -------- -------- Increase (Decrease) in Net Assets from A Share Transactions ....... 1,413 -- 3,517 -- -------- -------- -------- -------- L Shares: Proceeds from Shares Issued ..................................... -- -- -- -- Reinvestment of Cash Distributions .............................. -- -- -- -- Cost of Shares Repurchased ...................................... -- -- -- -- -------- -------- -------- -------- Increase in Net Assets from L Share Transactions .................. -- -- -- -- -------- -------- -------- -------- B Shares (2): Proceeds from Shares Issued ..................................... 10,738 1,896 10,808 2,605 Reinvestment of Cash Distributions .............................. 54 -- 87 1 Cost of Shares Repurchased ...................................... (567) (2) (1,204) (59) -------- -------- -------- -------- Increase in Net Assets from B Share Transactions .................. 10,225 1,894 9,691 2,547 -------- -------- -------- -------- Increase (Decrease) in Net Assets from Share Transactions ....... 17,307 (10,018) 29,617 10,560 -------- -------- -------- -------- Total Increase (Decrease) in Net Assets ....................... 28,103 (15,929) 42,023 7,821 -------- -------- -------- -------- Net Assets: Beginning of Year ............................................. 61,466 77,395 96,413 88,592 -------- -------- -------- -------- End of Year ................................................... $ 89,569 $ 61,466 $138,436 $ 96,413 ======== ======== ======== ======== Undistributed Net Investment Income ................................. $ 133 $ 117 $ 340 $ 279 ======== ======== ======== ======== (2) T Shares were offered beginning on November 6, 2003 for the Life Vision Conservative Fund. A Shares were offered beginning on October 16, 2003, November 11, 2003, November 5, 2003 and October 10, 2003 for the Life Vision Aggressive Growth Fund, the Life Vision Conservative Fund, the Life Vision Growth and Income Fund and the Life Vision Moderate Growth Fund, respectively. B Shares were offered beginning on March 11, 2003 for the Life Vision Aggressive Growth Fund, the Life Vision Conservative Fund, the Life Vision Growth and Income Fund and the Life Vision Moderate Growth Fund, respectively. Amounts designated as "--" are either $0 or have been rounded to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 113 STATEMENTS OF CHANGES IN NET ASSETS (000) -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31,
MID-CAP MID-CAP EQUITY VALUE EQUITY FUND FUND --------------------- --------------------- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 05/31/04 05/31/03 05/31/04 05/31/03 --------- ---------- --------- --------- Operations: Net Investment Income (Loss) ...................................... $ 999 $ (612) $ 669 $ 659 Net Realized Gain (Loss) on Securities Sold ....................... 22,721 (17,032) 18,863 (36,016) Net Change in Unrealized Appreciation (Depreciation) on Investments ................................... 6,629 (6,819) 12,849 724 -------- --------- -------- -------- Net Increase (Decrease) in Net Assets from Operations ................................................. 30,349 (24,463) 32,381 (34,633) -------- --------- -------- -------- Dividends and Distributions to Shareholders: Net Investment Income: T Shares ........................................................ (869) -- (653) (552) A Shares ........................................................ (41) -- -- -- L Shares ........................................................ (12) -- (1) (4) Capital Gains: T Shares ........................................................ -- -- -- (2,137) A Shares ........................................................ -- -- -- -- L Shares ........................................................ -- -- -- (108) -------- --------- -------- -------- Total Dividends and Distributions ................................. (922) -- (654) (2,801) -------- --------- -------- -------- Capital Transactions (1): T Shares: Proceeds from Shares Issued ..................................... 82,329 126,939 49,725 42,357 Reinvestment of Cash Distributions .............................. 360 -- 224 1,307 Redemption Fees ................................................. -- 83 -- -- Cost of Shares Repurchased ...................................... (48,540) (159,005) (32,636) (82,431) -------- --------- -------- -------- Increase (Decrease) in Net Assets From T Share Transactions ............................................ 34,149 (31,983) 17,313 (38,767) -------- --------- -------- -------- A Shares (2): Proceeds from Shares Issued ..................................... 6,855 4,798 781 -- Reinvestment of Cash Distributions .............................. 39 -- -- -- Cost of Shares Repurchased ...................................... (4,089) (2,409) (195) -- -------- --------- -------- -------- Increase (Decrease) in Net Assets From A Share Transactions ............................................ 2,805 2,389 586 -- -------- --------- -------- -------- L Shares (2): Proceeds from Shares Issued ..................................... 6,138 3,460 3,478 3,348 Reinvestment of Cash Distributions .............................. 11 -- 1 98 Cost of Shares Repurchased ...................................... (4,521) (3,677) (3,028) (1,971) -------- --------- -------- -------- Increase (Decrease) in Net Assets From L Share Transactions ............................................ 1,628 (217) 451 1,475 -------- --------- -------- -------- Increase (Decrease) in Net Assets From Share Transactions ............................................ 38,582 (29,811) 18,350 (37,292) -------- --------- -------- -------- Total Increase (Decrease) in Net Assets ....................... 68,009 (54,274) 50,077 (74,726) -------- --------- -------- -------- Net Assets: Beginning of Period ........................................... 142,242 196,516 105,598 180,324 -------- --------- -------- -------- End of Period ................................................. $210,251 $ 142,242 $155,675 $105,598 ======== ========= ======== ======== Undistributed Net Investment Income (Accumulated Net Investment Loss) ............................... $ 77 $ -- $ 142 $ 127 ======== ========= ======== ======== * Commencement of Operations. (1) See Note 5 in Notes to Financial Statements for additional information. (2) A Shares were offered beginning on October 27, 2003, October 9, 2003, October 8, 2003 and October 14, 2003 for the Mid-Cap Value Equity Fund, the Small Cap Value Equity Fund, the Strategic Quantitative Equity Fund and the Tax Sensitive Growth Stock Fund, respectively. L Shares were offered beginning on October 13, 2003 for the Strategic Quantitative Equity Fund. Amounts designated as "--" are either $0 or have been rounded to $0.
114 STATEMENTS OF CHANGES IN NET ASSETS (000) -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31,
SMALL CAP GROWTH SMALL CAP VALUE STOCK FUND EQUITY FUND ---------------------- --------------------- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 05/31/04 05/31/03 05/31/04 05/31/03 Operations: Net Investment Income (Loss) ...................................... $ (7,285) $ (4,842) $ 2,067 $ 3,018 Net Realized Gain (Loss) on Securities Sold ....................... 145,086 (73,786) 66,912 20,540 Net Change in Unrealized Appreciation (Depreciation) on Investments ................................... 80,171 14,238 113,873 (63,220) --------- --------- --------- --------- Net Increase (Decrease) in Net Assets from Operations ................................................. 217,972 (64,390) 182,852 (39,662) --------- --------- --------- --------- Dividends and Distributions to Shareholders: Net Investment Income: T Shares ........................................................ -- -- (2,433) (2,605) A Shares ........................................................ -- -- -- -- L Shares ........................................................ -- -- (5) -- Capital Gains: T Shares ........................................................ -- (8,364) -- -- A Shares ........................................................ -- (313) -- -- L Shares ........................................................ -- (427) -- -- --------- --------- --------- --------- Total Dividends and Distributions ................................. -- (9,104) (2,438) (2,605) --------- --------- --------- --------- Capital Transactions (1): T Shares: Proceeds from Shares Issued ..................................... 208,034 138,559 194,843 119,973 Reinvestment of Cash Distributions .............................. -- 6,573 1,303 1,424 Redemption Fees ................................................. -- -- -- -- Cost of Shares Repurchased ...................................... (187,311) (104,086) (200,738) (176,975) --------- --------- --------- --------- Increase (Decrease) in Net Assets From T Share Transactions ............................................ 20,723 41,046 (4,592) (55,578) --------- --------- --------- --------- A Shares (2): Proceeds from Shares Issued ..................................... 18,285 7,284 5,183 -- Reinvestment of Cash Distributions .............................. -- 296 -- -- Cost of Shares Repurchased ...................................... (7,136) (7,682) (1,130) -- --------- --------- --------- --------- Increase (Decrease) in Net Assets From A Share Transactions ............................................ 11,149 (102) 4,053 -- --------- --------- --------- --------- L Shares (2): Proceeds from Shares Issued ..................................... 14,012 6,509 11,644 13,859 Reinvestment of Cash Distributions .............................. -- 414 5 -- Cost of Shares Repurchased ...................................... (8,464) (6,817) (11,209) (10,389) --------- --------- --------- --------- Increase (Decrease) in Net Assets From L Share Transactions ............................................ 5,548 106 440 3,470 --------- --------- --------- --------- Increase (Decrease) in Net Assets From Share Transactions ............................................ 37,420 41,050 (99) (52,108) --------- --------- --------- --------- Total Increase (Decrease) in Net Assets ....................... 255,392 (32,444) 180,315 (94,375) --------- --------- --------- --------- Net Assets: Beginning of Period ........................................... 615,202 647,646 552,532 646,907 --------- --------- --------- --------- End of Period ................................................. $ 870,594 $ 615,202 $ 732,847 $ 552,532 ========= ========= ========= ========= Undistributed Net Investment Income (Accumulated Net Investment Loss) ............................... $ -- $ 208 $ 1,083 $ 1,454 ========= ========= ========= =========
STRATEGIC TAX SENSITIVE QUANTITATIVE GROWTH VALUE INCOME EQUITY FUND STOCK FUND STOCK FUND ------------ ----------------------- ----------------------- 08/07/03*- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 05/31/04 05/31/04 05/31/03 05/31/04 05/31/03 ---------- --------- --------- --------- --------- Operations: Net Investment Income (Loss) ................... $ (90) $ (1,885) $ (1,308) $ 10,571 $ 11,079 Net Realized Gain (Loss) on Securities Sold .... 3,973 31,183 (64,791) 71,412 (77,218) Net Change in Unrealized Appreciation (Depreciation) on Investments ................ 3,104 2,584 16,858 62,760 (14,271) ------- --------- --------- --------- --------- Net Increase (Decrease) in Net Assets from Operations .............................. 6,987 31,882 (49,241) 144,743 (80,410) ------- --------- --------- --------- --------- Dividends and Distributions to Shareholders: Net Investment Income: T Shares ..................................... -- -- -- (9,766) (9,401) A Shares ..................................... -- -- -- (744) (735) L Shares ..................................... -- -- -- (212) (189) Capital Gains: T Shares ..................................... (972) -- -- -- -- A Shares ..................................... (1) -- -- -- -- L Shares ..................................... (21) -- -- -- -- ------- --------- --------- --------- --------- Total Dividends and Distributions .............. (994) -- -- (10,722) (10,325) ------- --------- --------- --------- --------- Capital Transactions (1): T Shares: Proceeds from Shares Issued .................. 63,691 10,614 79,785 117,907 189,197 Reinvestment of Cash Distributions ........... 655 -- -- 7,527 7,198 Redemption Fees .............................. -- -- -- -- -- Cost of Shares Repurchased ................... (3,492) (84,727) (97,881) (204,589) (126,339) ------- --------- --------- --------- --------- Increase (Decrease) in Net Assets From T Share Transactions ......................... 60,854 (74,113) (18,096) (79,155) 70,056 ------- --------- --------- --------- --------- A Shares (2): Proceeds from Shares Issued .................. 156 664 -- 8,238 10,612 Reinvestment of Cash Distributions ........... 1 -- -- 704 705 Cost of Shares Repurchased ................... (3) (318) -- (12,649) (12,542) ------- --------- --------- --------- --------- Increase (Decrease) in Net Assets From A Share Transactions ......................... 154 346 -- (3,707) (1,225) ------- --------- --------- --------- --------- L Shares (2): Proceeds from Shares Issued .................. 1,627 4,890 7,888 11,995 8,232 Reinvestment of Cash Distributions ........... 19 -- -- 201 181 Cost of Shares Repurchased ................... (107) (33,456) (44,717) (12,967) (11,412) ------- --------- --------- --------- --------- Increase (Decrease) in Net Assets From L Share Transactions ......................... 1,539 (28,566) (36,829) (771) (2,999) ------- --------- --------- --------- --------- Increase (Decrease) in Net Assets From Share Transactions ......................... 62,547 (102,333) (54,925) (83,633) 65,832 ------- --------- --------- --------- --------- Total Increase (Decrease) in Net Assets .... 68,540 (70,451) (104,166) 50,388 (24,903) ------- --------- --------- --------- --------- Net Assets: Beginning of Period ........................ -- 308,514 412,680 796,200 821,103 ------- --------- --------- --------- --------- End of Period .............................. $68,540 $ 238,063 $ 308,514 $ 846,588 $ 796,200 ======= ========= ========= ========= ========= Undistributed Net Investment Income (Accumulated Net Investment Loss) ............ $ (18) $ (1,149) $ (835) $ 2,012 $ 2,163 ======= ========= ========= ========= =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 115 FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31, FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
NET ASSET NET REALIZED AND DIVIDENDS TOTAL VALUE, NET UNREALIZED GAINS TOTAL FROM NET DISTRIBUTIONS DIVIDENDS BEGINNING INVESTMENT (LOSSES) FROM INVESTMENT FROM REALIZED AND OF PERIOD INCOME (LOSS) ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS --------- ------------- ---------------- ---------- ---------- -------------- ------------- AGGRESSIVE GROWTH STOCK FUND T Shares 2004(1) $10.00 $(0.02)(2) $ 0.02(2) $ -- $ -- $ -- $ -- A Shares 2004(1) $10.00 $(0.03)(2) $ 0.02(2) $(0.01) $ -- $ -- $ -- L Shares 2004(1) $10.00 $(0.04)(2) $ 0.01(2) $(0.03) $ -- $ -- $ -- BALANCED FUND T Shares 2004 $11.92 $ 0.18(2) $ 0.32(2) $ 0.50 $(0.19) $ -- $(0.19) 2003 12.18 0.20 (0.23) (0.03) (0.23) -- (0.23) 2002 13.18 0.23 (0.65) (0.42) (0.24) (0.34) (0.58) 2001 13.37 0.30 0.12 0.42 (0.31) (0.30) (0.61) 2000 13.26 0.32 0.33 0.65 (0.30) (0.24) (0.54) A Shares 2004 $11.97 $ 0.14(2) $ 0.33(2) $ 0.47 $(0.16) $ -- $(0.16) 2003 12.24 0.16 (0.24) (0.08) (0.19) -- (0.19) 2002 13.24 0.18 (0.64) (0.46) (0.20) (0.34) (0.54) 2001 13.43 0.27 0.11 0.38 (0.27) (0.30) (0.57) 2000 13.32 0.29 0.31 0.60 (0.25) (0.24) (0.49) L Shares 2004 $11.82 $ 0.05(2) $ 0.32(2) $ 0.37 $(0.07) $ -- $(0.07) 2003 12.07 0.08 (0.22) (0.14) (0.11) -- (0.11) 2002 13.07 0.10 (0.65) (0.55) (0.11) (0.34) (0.45) 2001 13.27 0.16 0.11 0.27 (0.17) (0.30) (0.47) 2000 13.17 0.17 0.33 0.50 (0.16) (0.24) (0.40) CAPITAL APPRECIATION FUND T Shares 2004 $11.02 $(0.03)(2) $ 1.34(2) $ 1.31 $ -- $ -- $ -- 2003 12.24 (0.03)(2) (1.19)(2) (1.22) -- -- -- 2002 13.89 -- (1.53) (1.53) -- (0.12) (0.12) 2001 17.12 (0.05) (0.38) (0.43) -- (2.80) (2.80) 2000 16.62 0.02 1.40 1.42 -- (0.92) (0.92) A Shares 2004 $10.63 $(0.10)(2) $ 1.29(2) $ 1.19 $ -- $ -- $ -- 2003 11.89 (0.10)(2) (1.16)(2) (1.26) -- -- -- 2002 13.59 (0.10) (1.48) (1.58) -- (0.12) (0.12) 2001 16.91 (0.14) (0.38) (0.52) -- (2.80) (2.80) 2000 16.53 (0.11) 1.41 1.30 -- (0.92) (0.92) L Shares 2004 $10.15 $(0.15)(2) $ 1.22(2) $ 1.07 $ -- $ -- $ -- 2003 11.40 (0.14)(2) (1.11)(2) (1.25) -- -- -- 2002 13.09 (0.06) (1.51) (1.57) -- (0.12) (0.12) 2001 16.45 (0.16) (0.40) (0.56) -- (2.80) (2.80) 2000 16.18 (0.24) 1.43 1.19 -- (0.92) (0.92) EMERGING GROWTH STOCK FUND T Shares 2004(1) $10.00 $(0.03)(2) $(0.37)(2) $(0.40) $ -- $ -- $ -- A Shares 2004(1) $10.00 $(0.04)(2) $(0.37)(2) $(0.41) $ -- $ -- $ -- L Shares 2004(3) $10.14 $(0.05)(2) $(0.51)(2) $(0.56) $ -- $ -- $ -- + Returns are for the period indicated and have not been annualized. Total return figures do not include applicable sales loads. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. ++ Ratio reflects the impact of the initial low level of average net assets associated with commencement of operations. (1) Commenced operations on February 23, 2004. All ratios for the period have been annualized. (2) Per share data calculated using average shares outstanding method. (3) Commenced operations on February 27, 2004. All ratios for the period have been annualized. Amounts designated as "--" are either $0 or have been rounded to $0.
116 --------------------------------------------------------------------------------
RATIO OF NET ASSET NET ASSETS, RATIO OF NET INVESTMENT VALUE, END TOTAL END OF NET EXPENSES TO INCOME (LOSS) TO OF PERIOD RETURN+ PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS ---------- ------- ------------ ------------------ ------------------ AGGRESSIVE GROWTH STOCK FUND T Shares 2004(1) $10.00 --% $ 20,501 1.22% (0.74)% A Shares 2004(1) $ 9.99 (0.10)% $ 49 1.65% (1.25)% L Shares 2004(1) $ 9.97 (0.30)% $ 65 2.10% (1.69)% BALANCED FUND T Shares 2004 $12.23 4.24% $ 244,042 1.02% 1.50% 2003 11.92 (0.14) 228,475 1.02 1.74 2002 12.18 (3.29) 241,604 1.02 1.78 2001 13.18 3.24 209,316 1.01 2.24 2000 13.37 5.02 223,634 0.97 2.39 A Shares 2004 $12.28 3.91% $ 8,902 1.34% 1.18% 2003 11.97 (0.54) 8,285 1.33 1.43 2002 12.24 (3.57) 9,020 1.33 1.46 2001 13.24 2.91 7,834 1.32 1.93 2000 13.43 4.66 9,627 1.27 2.07 L Shares 2004 $12.12 3.12% $ 65,435 2.09% 0.42% 2003 11.82 (1.15) 67,567 2.09 0.67 2002 12.07 (4.33) 74,880 2.09 0.71 2001 13.07 2.11 67,824 2.07 1.18 2000 13.27 3.88 64,322 2.03 1.33 CAPITAL APPRECIATION FUND T Shares 2004 $12.33 11.89% $1,248,636 1.23% (0.25)% 2003 11.02 (9.97) 1,090,549 1.22 (0.32) 2002 12.24 (11.06) 1,204,445 1.22 (0.54) 2001 13.89 (3.74) 1,177,933 1.21 (0.29) 2000 17.12 8.98 1,296,927 1.17 0.10 A Shares 2004 $11.82 11.19% $ 145,883 1.88% (0.91)% 2003 10.63 (10.60) 141,488 1.88 (0.98) 2002 11.89 (11.68) 163,155 1.88 (1.20) 2001 13.59 (4.38) 202,548 1.86 (0.94) 2000 16.91 8.29 251,421 1.82 (0.55) L Shares 2004 $11.22 10.54% $ 100,472 2.35% (1.38)% 2003 10.15 (10.96) 94,505 2.35 (1.45) 2002 11.40 (12.05) 110,923 2.35 (1.67) 2001 13.09 (4.79) 112,497 2.33 (1.41) 2000 16.45 7.77 128,159 2.29 (1.03) EMERGING GROWTH STOCK FUND T Shares 2004(1) $ 9.60 (4.00)% $ 12,891 1.22% (1.04)% A Shares 2004(1) $ 9.59 (4.10)% $ 39 1.65% (1.46)% L Shares 2004(3) $ 9.58 (5.52)% $ 34 2.11% (1.95)%
RATIO OF EXPENSES TO AVERAGE NET ASSETS PORTFOLIO (EXCLUDING WAIVERS TURNOVER AND/OR REIMBURSEMENTS) RATE ---------------------- --------- AGGRESSIVE GROWTH STOCK FUND T Shares 2004(1) 1.61% 2% A Shares 2004(1) 11.29%++ 2% L Shares 2004(1) 8.78%++ 2% BALANCED FUND T Shares 2004 1.05% 116% 2003 1.05 102 2002 1.05 95 2001 1.05 99 2000 1.07 182 A Shares 2004 1.54% 116% 2003 1.55 102 2002 1.55 95 2001 1.54 99 2000 1.51 182 L Shares 2004 2.18% 116% 2003 2.18 102 2002 2.16 95 2001 2.15 99 2000 2.18 182 CAPITAL APPRECIATION FUND T Shares 2004 1.24% 106% 2003 1.24 69 2002 1.24 75 2001 1.24 75 2000 1.26 129 A Shares 2004 2.00% 106% 2003 2.00 69 2002 1.99 75 2001 1.98 75 2000 1.98 129 L Shares 2004 2.43% 106% 2003 2.45 69 2002 2.39 75 2001 2.39 75 2000 2.39 129 EMERGING GROWTH STOCK FUND T Shares 2004(1) 1.69% 11% A Shares 2004(1) 13.36%++ 11% L Shares 2004(3) 18.36%++ 11% THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 117 FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31, FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
NET ASSET NET REALIZED AND DIVIDENDS TOTAL VALUE, NET UNREALIZED GAINS TOTAL FROM NET DISTRIBUTIONS DIVIDENDS BEGINNING INVESTMENT (LOSSES) FROM INVESTMENT FROM REALIZED AND OF PERIOD INCOME (LOSS) ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS --------- ------------- ---------------- ---------- ---------- -------------- ------------- GROWTH AND INCOME FUND T Shares 2004 $12.21 $ 0.14(1) $ 2.50(1) $ 2.64 $(0.13) $ -- $(0.13) 2003 13.80 0.13 (1.60) (1.47) (0.12) -- (0.12) 2002 15.05 0.09 (1.26) (1.17) (0.08) -- (0.08) 2001 15.53 0.07 (0.04) 0.03 (0.08) (0.43) (0.51) 2000 16.09 0.11 0.55 0.66 (0.10) (1.12) (1.22) A Shares 2004 $12.31 $ 0.12(1) $ 2.51(1) $ 2.63 $(0.11) $ -- $(0.11) 2003 13.91 0.11 (1.61) (1.50) (0.10) -- (0.10) 2002 15.17 0.06 (1.27) (1.21) (0.05) -- (0.05) 2001 15.65 0.04 (0.04) -- (0.05) (0.43) (0.48) 2000 16.21 0.09 0.55 0.64 (0.08) (1.12) (1.20) L Shares 2004 $12.08 $ 0.01(1) $ 2.47(1) $ 2.48 $(0.02) $ -- $(0.02) 2003 13.66 -- (1.56) (1.56) (0.02) -- (0.02) 2002 14.96 (0.02) (1.28) (1.30) -- -- -- 2001 15.49 (0.05) (0.05) (0.10) -- (0.43) (0.43) 2000 16.10 -- 0.51 0.51 -- (1.12) (1.12) INFORMATION AND TECHNOLOGY FUND T Shares 2004 $ 6.07 $(0.06)(1) $ 1.49(1) $ 1.43 $ -- $ -- $ -- 2003 8.06 (0.04)(1) (1.95)(1) (1.99) -- -- -- 2002 13.34 0.01 (5.29) (5.28) -- -- -- 2001 15.87 (0.08) (2.45) (2.53) -- -- -- 2000(2) 10.00 (0.04) 5.91 5.87 -- -- -- A Shares 2004(3) $ 7.16 $(0.07)(1) $ 0.40(1) $ 0.33 $ -- $ -- $ -- L Shares 2004 $ 5.86 $(0.12)(1) $ 1.44(1) $ 1.32 $ -- $ -- $ -- 2003 7.86 (0.09)(1) (1.91)(1) (2.00) -- -- -- 2002 13.15 (0.14) (5.15) (5.29) -- -- -- 2001 15.81 (0.22) (2.44) (2.66) -- -- -- 2000(4) 18.20 (0.07) (2.32) (2.39) -- -- -- INTERNATIONAL EQUITY FUND T Shares 2004 $ 8.00 $ 0.10(1) $ 2.19(1) $ 2.29 $(0.14) $ -- $(0.14) 2003 9.31 0.07 (1.32) (1.25) (0.06) -- (0.06) 2002 10.19 0.19 (1.07) (0.88) -- -- -- 2001 12.56 -- (1.22) (1.22) (0.04) (1.11) (1.15) 2000 12.97 (0.10) 1.42 1.32 (0.07) (1.66) (1.73) A Shares 2004 $ 7.92 $ 0.04(1) $ 2.17(1) $ 2.21 $(0.10) $ -- $(0.10) 2003 9.21 0.04 (1.30) (1.26) (0.03) -- (0.03) 2002 10.11 0.14 (1.04) (0.90) -- -- -- 2001 12.47 (0.02) (1.23) (1.25) -- (1.11) (1.11) 2000 12.89 (0.11) 1.37 1.26 (0.02) (1.66) (1.68) L Shares 2004 $ 7.50 $(0.01)(1) $ 2.06(1) $ 2.05 $(0.06) $ -- $(0.06) 2003 8.75 (0.01) (1.24) (1.25) -- -- -- 2002 9.68 0.04 (0.97) (0.93) -- -- -- 2001 12.06 (0.16) (1.11) (1.27) -- (1.11) (1.11) 2000 12.58 (0.32) 1.46 1.14 -- (1.66) (1.66) + Returns are for the period indicated and have not been annualized. Total return figures do not include applicable sales loads. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. ++ Ratio reflects the impact of the initial low level of average net assets associated with commencement of operations. (1) Per share data calculated using average shares outstanding method. (2) T Shares were offered beginning on September 30, 1999. All ratios for the period have been annualized. (3) A Shares were offered beginning on October 27, 2003. All ratios for the period have been annualized. (4) L Shares were offered beginning on January 24, 2000. All ratios for the period have been annualized. Amounts designated as "--" are either $0 or have been rounded to $0.
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RATIO OF NET ASSET NET ASSETS, RATIO OF NET INVESTMENT VALUE, END TOTAL END OF NET EXPENSES TO INCOME (LOSS) TO OF PERIOD RETURN+ PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS ---------- ------- ------------ ------------------ ------------------ GROWTH AND INCOME FUND T Shares 2004 $14.72 21.76% $ 782,665 1.00% 1.03% 2003 12.21 (10.58) 598,862 0.99 1.05 2002 13.80 (7.80) 792,557 0.99 0.63 2001 15.05 0.11 867,664 0.99 0.49 2000 15.53 4.11 885,109 1.01 0.76 A Shares 2004 $14.83 21.45% $ 45,808 1.18% 0.84% 2003 12.31 (10.74) 36,305 1.18 0.88 2002 13.91 (7.97) 36,789 1.18 0.44 2001 15.17 (0.07) 40,174 1.18 0.30 2000 15.65 3.92 42,666 1.18 0.58 L Shares 2004 $14.54 20.58% $ 97,899 1.93% 0.09% 2003 12.08 (11.41) 74,261 1.93 0.11 2002 13.66 (8.69) 94,671 1.93 (0.29) 2001 14.96 (0.77) 78,376 1.93 (0.45) 2000 15.49 3.11 62,462 1.93 (0.14) INFORMATION AND TECHNOLOGY FUND T Shares 2004 $ 7.50 23.56% $ 9,712 1.36% (0.87)% 2003 6.07 (24.69) 11,789 1.25 (0.72) 2002 8.06 (39.58) 32,068 1.19 (0.92) 2001 13.34 (15.94) 87,045 1.20 (0.45) 2000(2) 15.87 58.70 106,425 1.20 (0.54) A Shares 2004(3) $ 7.49 4.61% $ 2 1.72% (1.52)% L Shares 2004 $ 7.18 22.53% $ 7,377 2.25% (1.79)% 2003 5.86 (25.45) 6,485 2.25 (1.68) 2002 7.86 (40.23) 10,851 2.25 (1.99) 2001 13.15 (16.82) 22,104 2.25 (1.50) 2000(4) 15.81 (13.13) 20,201 2.25 (1.65) INTERNATIONAL EQUITY FUND T Shares 2004 $10.15 28.64% $ 332,180 1.41% 1.08% 2003 8.00 (13.40) 191,041 1.46 0.83 2002 9.31 (8.64) 252,991 1.48 0.48 2001 10.19 (10.79) 208,120 1.45 0.50 2000 12.56 10.58 299,100 1.48 0.59 A Shares 2004 $10.03 27.97% $ 7,056 1.83% 0.46% 2003 7.92 (13.70) 6,408 1.83 0.59 2002 9.21 (8.90) 5,272 1.83 (0.21) 2001 10.11 (11.13) 7,517 1.79 0.18 2000 12.47 10.15 10,462 1.83 0.33 L Shares 2004 $ 9.49 27.32% $ 7,606 2.53% (0.15)% 2003 7.50 (14.29) 5,678 2.53 (0.17) 2002 8.75 (9.61) 6,567 2.53 (0.73) 2001 9.68 (11.71) 7,765 2.48 (0.51) 2000 12.06 9.38 10,891 2.53 (0.38)
RATIO OF EXPENSES TO AVERAGE NET ASSETS PORTFOLIO (EXCLUDING WAIVERS TURNOVER AND/OR REIMBURSEMENTS) RATE ---------------------- --------- GROWTH AND INCOME FUND T Shares 2004 1.00% 51% 2003 0.99 52 2002 0.99 68 2001 0.99 73 2000 1.01 53 A Shares 2004 1.36% 51% 2003 1.38 52 2002 1.36 68 2001 1.35 73 2000 1.31 53 L Shares 2004 2.17% 51% 2003 2.20 52 2002 2.16 68 2001 2.14 73 2000 2.18 53 INFORMATION AND TECHNOLOGY FUND T Shares 2004 1.36% 384% 2003 1.25 1,259 2002 1.19 1,102 2001 1.21 750 2000(2) 1.34 250 A Shares 2004(3) 310.77%++ 384% L Shares 2004 2.86% 384% 2003 3.00 1,259 2002 2.57 1,102 2001 2.45 750 2000(4) 2.40 250 INTERNATIONAL EQUITY FUND T Shares 2004 1.41% 58% 2003 1.46 89 2002 1.48 102 2001 1.45 68 2000 1.48 179 A Shares 2004 2.06% 58% 2003 2.22 89 2002 2.08 102 2001 1.97 68 2000 1.95 179 L Shares 2004 2.86% 58% 2003 3.03 89 2002 2.93 102 2001 2.57 68 2000 2.74 179 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 119 FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31, FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
NET ASSET NET REALIZED AND DIVIDENDS TOTAL VALUE, NET UNREALIZED GAINS TOTAL FROM NET DISTRIBUTIONS DIVIDENDS BEGINNING INVESTMENT (LOSSES) FROM INVESTMENT FROM REALIZED AND OF PERIOD INCOME (LOSS) ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS --------- ------------- ---------------- ---------- ---------- -------------- ------------- INTERNATIONAL EQUITY INDEX FUND T Shares 2004 $ 8.39 $ 0.14(1) $ 2.71(1) $ 2.85 $(0.13) $ -- $(0.13) 2003 9.76 0.10(1) (1.43)(1) (1.33) (0.04) -- (0.04) 2002 11.18 0.04 (1.43) (1.39) (0.03) -- (0.03) 2001 13.97 0.06 (2.69) (2.63) (0.07) (0.09) (0.16) 2000 11.82 0.16 2.13 2.29 (0.03) (0.11) (0.14) A Shares 2004 $ 8.28 $ 0.07(1) $ 2.68(1) $ 2.75 $(0.10) $ -- $(0.10) 2003 9.64 0.10(1) (1.45)(1) (1.35) (0.01) -- (0.01) 2002 11.05 (0.02) (1.38) (1.40) (0.01) -- (0.01) 2001 13.80 (0.01) (2.65) (2.66) -- (0.09) (0.09) 2000 11.70 (0.11) 2.32 2.21 -- (0.11) (0.11) L Shares 2004 $ 8.10 $ 0.02(1) $ 2.62(1) $ 2.64 $(0.05) $ -- $(0.05) 2003 9.48 0.01(1) (1.39)(1) (1.38) -- -- -- 2002 10.93 (0.12) (1.33) (1.45) -- -- -- 2001 13.74 (0.06) (2.66) (2.72) -- (0.09) (0.09) 2000 11.73 0.08 2.04 2.12 -- (0.11) (0.11) LIFE VISION AGGRESSIVE GROWTH FUND (A) (B) T Shares 2004 $ 8.55 $ 0.04(1) $ 1.70(1) $ 1.74 $(0.04)* $ -- $(0.04)* 2003 9.57 0.03 (1.02) (0.99) (0.03) -- (0.03) 2002 10.31 0.02 (0.74) (0.72) (0.02) -- (0.02) 2001 11.61 0.11 0.23 0.34 (0.12) (1.52) (1.64) 2000 11.31 0.05 0.74 0.79 (0.05) (0.44) (0.49) A Shares 2004(2) $ 9.46 $(0.01)(1) $ 0.81(1) $ 0.80 $(0.03) $ -- $(0.03) B Shares 2004 $ 8.53 $(0.04)(1) $ 1.70(1) $ 1.66 $(0.01) $ -- $(0.01) 2003(3) 7.23 (0.01) 1.31 1.30 -- -- -- LIFE VISION CONSERVATIVE FUND (A) (B) T Shares 2004(4) $10.71 $ 0.15(1) $ 0.14(1) $ 0.29 $(0.13) $ -- $(0.13) A Shares 2004(5) $10.68 $ 0.12(1) $ 0.18(1) $ 0.30 $(0.12) $ -- $(0.12) B Shares 2004 $10.43 $ 0.17(1) $ 0.39(1) $ 0.56 $(0.13) $ -- $(0.13) 2003(3) 10.00 0.01 0.42 0.43 -- -- -- LIFE VISION GROWTH AND INCOME FUND (A) (B) T Shares 2004 $ 9.33 $ 0.14(1) $ 1.43(1) $ 1.57 $(0.14) $ -- $(0.14) 2003 9.98 0.13 (0.65) (0.52) (0.13) -- (0.13) 2002 10.42 0.12 (0.43) (0.31) (0.13) -- (0.13) 2001 10.50 0.24 0.40 0.64 (0.25) (0.47) (0.72) 2000 10.33 0.07 0.52 0.59 (0.17) (0.25) (0.42) A Shares 2004(6) $10.18 $ 0.06(1) $ 0.58(1) $ 0.64 $(0.07) $ -- $(0.07) B Shares 2004 $ 9.34 $ 0.07(1) $ 1.42(1) $ 1.49 $(0.09) $ -- $(0.09) 2003(3) 8.10 0.02 1.24 1.26 (0.02) -- (0.02) * Includes return of capital of $0.003. + Returns are for the period indicated and have not been annualized. Total return figures do not include applicable sales loads. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. ++ Ratio reflects the impact of the initial low level of average net assets associated with commencement of operations. (1) Per share data calculated using average shares outstanding method. (2) A Shares were offered beginning on October 16, 2003. All ratios for the period have been annualized. (3) B Shares were offered beginning on March 11, 2003. All ratios for the period have been annualized. (4) T Shares were offered beginning on November 6, 2003. All ratios for the period have been annualized. (5) A Shares were offered beginning on November 11, 2003. All ratios for the period have been annualized. (6) A Shares were offered beginning on November 5, 2003. All ratios for the period have been annualized. (A) The Life Vision Funds and its shareholders indirectly bear a pro rata share of the expenses of the underlying STIClassic Funds. The expense ratios do not include such expenses. (B) Recognition of net investment income by the Life Vision Funds is affected by the timing of the declaration of dividends by the STI Classic Funds in which the Life Vision Funds invest. Amounts designated as "--" are either $0 or have been rounded to $0.
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RATIO OF NET ASSET NET ASSETS, RATIO OF NET INVESTMENT VALUE, END TOTAL END OF NET EXPENSES TO INCOME (LOSS) TO OF PERIOD RETURN+ PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS ---------- ------- ------------ ------------------ ------------------ INTERNATIONAL EQUITY INDEX FUND T Shares 2004 $11.11 34.07% $ 351,163 0.98% 1.38% 2003 8.39 (13.63) 248,770 1.03 1.26 2002 9.76 (12.43) 287,944 1.04 0.63 2001 11.18 (18.90) 236,862 1.06 0.40 2000 13.97 19.36 340,853 1.07 0.83 A Shares 2004 $10.93 33.26% $ 15,037 1.49% 0.73% 2003 8.28 (14.03) 9,877 1.49 1.33 2002 9.64 (12.65) 3,222 1.49 (0.12) 2001 11.05 (19.31) 3,451 1.46 0.05 2000 13.80 18.86 4,563 1.47 0.07 L Shares 2004 $10.69 32.60% $ 5,208 2.14% 0.25% 2003 8.10 (14.56) 3,093 2.14 0.18 2002 9.48 (13.27) 3,505 2.14 (0.68) 2001 10.93 (19.84) 4,731 2.10 (0.61) 2000 13.74 18.04 5,853 2.12 (0.36) LIFE VISION AGGRESSIVE GROWTH FUND (A) (B) T Shares 2004 $10.25 20.34% $ 38,468 0.25% 0.39% 2003 8.55 (10.36) 28,681 0.25 0.33 2002 9.57 (6.96) 34,398 0.25 0.17 2001 10.31 3.07 23,936 0.25 1.05 2000 11.61 7.25 18,412 0.25 0.48 A Shares 2004(2) $10.23 8.43% $ 867 0.51% (0.24)% B Shares 2004 $10.18 19.49% $ 4,367 1.00% (0.36)% 2003(3) 8.53 18.03 1,052 0.89 (0.86) LIFE VISION CONSERVATIVE FUND (A) (B) T Shares 2004(4) $10.87 2.68% $ 30 0.25% 2.41% A Shares 2004(5) $10.86 2.82% $ 474 0.57% 2.06% B Shares 2004 $10.86 5.38% $ 5,012 0.95% 1.54% 2003(3) 10.43 4.30 800 0.92 0.85 LIFE VISION GROWTH AND INCOME FUND (A) (B) T Shares 2004 $10.76 16.92% $ 75,083 0.25% 1.38% 2003 9.33 (5.16) 59,449 0.25 1.46 2002 9.98 (2.97) 77,395 0.25 1.25 2001 10.42 6.31 37,550 0.25 2.41 2000 10.50 5.81 30,473 0.25 1.77 A Shares 2004(6) $10.75 6.32% $ 1,426 0.56% 1.04% B Shares 2004 $10.74 15.99% $ 13,060 1.00% 0.63% 2003(3) 9.34 15.57 2,017 0.90 0.39
RATIO OF EXPENSES TO AVERAGE NET ASSETS PORTFOLIO (EXCLUDING WAIVERS TURNOVER AND/OR REIMBURSEMENTS) RATE ---------------------- --------- INTERNATIONAL EQUITY INDEX FUND T Shares 2004 1.07% 10% 2003 1.12 25 2002 1.12 35 2001 1.09 13 2000 1.18 9 A Shares 2004 1.61% 10% 2003 1.87 25 2002 1.90 35 2001 1.83 13 2000 1.79 9 L Shares 2004 2.54% 10% 2003 2.82 25 2002 2.62 35 2001 2.15 13 2000 2.61 9 LIFE VISION AGGRESSIVE GROWTH FUND (A) (B) T Shares 2004 0.39% 44% 2003 0.40 50 2002 0.41 101 2001 0.43 202 2000 0.44 183 A Shares 2004(2) 5.15% 44% B Shares 2004 1.95% 44% 2003(3) 1.36 50 LIFE VISION CONSERVATIVE FUND (A) (B) T Shares 2004(4) 85.33%++ 138% A Shares 2004(5) 4.00% 138% B Shares 2004 1.81% 138% 2003(3) 1.39 160 LIFE VISION GROWTH AND INCOME FUND (A) (B) T Shares 2004 0.36% 97% 2003 0.37 139 2002 0.39 166 2001 0.39 286 2000 0.42 189 A Shares 2004(6) 1.95% 97% B Shares 2004 1.61% 97% 2003(3) 1.34 139 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 121 FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31, FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
NET ASSET NET REALIZED AND DIVIDENDS TOTAL VALUE, NET UNREALIZED GAINS TOTAL FROM NET DISTRIBUTIONS DIVIDENDS BEGINNING INVESTMENT (LOSSES) FROM INVESTMENT FROM REALIZED AND OF PERIOD INCOME (LOSS) ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS --------- ------------- ---------------- ---------- ---------- ------------- ------------- LIFE VISION MODERATE GROWTH FUND (A) (B) T Shares 2004 $ 9.02 $ 0.16(1) $ 1.04(1) $ 1.20 $(0.16) $ -- $(0.16) 2003 9.40 0.16 (0.38) (0.22) (0.16) -- (0.16) 2002 9.73 0.17 (0.32) (0.15) (0.18) -- (0.18) 2001 10.61 0.32 0.20 0.52 (0.34) (1.06) (1.40) 2000 10.80 0.33 0.13 0.46 (0.21) (0.44) (0.65) A Shares 2004(2) $ 9.58 $ 0.10(1) $ 0.45(1) $ 0.55 $(0.08) $ -- $(0.08) B Shares 2004 $ 9.00 $ 0.09(1) $ 1.04(1) $ 1.13 $(0.10) $ -- $(0.10) 2003(3) 8.05 0.03 0.95 0.98 (0.03) -- (0.03) MID-CAP EQUITY FUND T Shares 2004 $ 8.74 $ 0.06(1) $ 1.57(1) $ 1.63 $(0.05) $ -- $(0.05) 2003 9.79 (0.03)(1) (1.02)(1)++ (1.05)++ -- -- -- 2002 10.95 0.01 (1.17) (1.16) -- -- -- 2001 14.10 (0.03) (0.61) (0.64) -- (2.51) (2.51) 2000 12.68 (0.04) 2.32 2.28 -- (0.86) (0.86) A Shares 2004 $ 8.42 $ 0.02(1) $ 1.51(1) $ 1.53 $(0.03) $ -- $(0.03) 2003 9.47 (0.05)(1) (1.00)(1) (1.05) -- -- -- 2002 10.64 (0.03) (1.14) (1.17) -- -- -- 2001 13.82 (0.05) (0.62) (0.67) -- (2.51) (2.51) 2000 12.50 (0.19) 2.37 2.18 -- (0.86) (0.86) L Shares 2004 $ 7.92 $(0.04)(1) $ 1.43(1) $ 1.39 $(0.01) $ -- $(0.01) 2003 8.97 (0.10)(1) (0.95)(1) (1.05) -- -- -- 2002 10.14 0.02 (1.19) (1.17) -- -- -- 2001 13.35 (0.07) (0.63) (0.70) -- (2.51) (2.51) 2000 12.17 (0.22) 2.26 2.04 -- (0.86) (0.86) MID-CAP VALUE EQUITY FUND T Shares 2004 $ 8.62 $ 0.05(1) $ 2.33(1) $ 2.38 $(0.05) $ -- $(0.05) 2003 10.95 0.05 (2.16) (2.11) (0.04) (0.18) (0.22) 2002(4) 10.00 0.02 0.94 0.96 (0.01) -- (0.01) A Shares 2004(5) $ 9.39 $ 0.02(1) $ 1.55(1) $ 1.57 $(0.02) $ -- $(0.02) L Shares 2004 $ 8.58 $(0.01)(1) $ 2.33(1) $ 2.32 $ --* $ -- $ --* 2003 10.92 0.01 (2.16) (2.15) (0.01) (0.18) (0.19) 2002(4) 10.00 (0.01) 0.93 0.92 -- -- -- SMALL CAP GROWTH STOCK FUND T Shares 2004 $15.19 $(0.16)(1) $ 5.22(1) $ 5.06 $ -- $ -- $ -- 2003 17.28 (0.12)(1) (1.72)(1) (1.84) -- (0.25) (0.25) 2002 18.37 -- (1.02) (1.02) -- (0.07) (0.07) 2001 18.30 (0.18) 1.71 1.53 -- (1.46) (1.46) 2000 14.55 (0.08) 4.02 3.94 -- (0.19) (0.19) A Shares 2004 $15.00 $(0.22)(1) $ 5.14(1) $ 4.92 $ -- $ -- $ -- 2003 17.12 (0.17)(1) (1.70)(1) (1.87) -- (0.25) (0.25) 2002 18.26 (0.17) (0.90) (1.07) -- (0.07) (0.07) 2001 18.27 (0.59) 2.04 1.45 -- (1.46) (1.46) 2000(6) 16.46 (0.07) 1.88 1.81 -- -- -- L Shares 2004 $14.45 $(0.34)(1) $ 4.95(1) $ 4.61 $ -- $ -- $ -- 2003 16.62 (0.26)(1) (1.66)(1) (1.92) -- (0.25) (0.25) 2002 17.85 (0.02) (1.14) (1.16) -- (0.07) (0.07) 2001 18.00 (0.25) 1.56 1.31 -- (1.46) (1.46) 2000 14.46 (0.04) 3.77 3.73 -- (0.19) (0.19) * Amount represents less than $0.005. + Returns are for the period indicated and have not been annualized. Total return figures do not include applicable sales loads. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. ++ Includes redemption fees of $0.01. (1) Per share data calculated using average shares outstanding method. (2) A Shares were offered beginning on October 10, 2003. All ratios for the period have been annualized. (3) B Shares were offered beginning on March 11, 2003. All ratios for the period have been annualized. (4) Commenced operations on November 30, 2001. All ratios for the period have been annualized. (5) A Shares were offered beginning on October 27, 2003. All ratios for the period have been annualized. (6) A Shares were offered beginning on December 12, 1999. All ratios for the period have been annualized.
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RATIO OF NET ASSET NET ASSETS, RATIO OF NET INVESTMENT VALUE, END TOTAL END OF NET EXPENSES TO INCOME (LOSS) TO OF PERIOD RETURN+ PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS ---------- ------- ------------ ------------------ ------------------ LIFE VISION MODERATE GROWTH FUND (A) (B) T Shares 2004 $10.06 13.35% $ 121,659 0.25% 1.65% 2003 9.02 (2.21) 93,722 0.25 1.87 2002 9.40 (1.52) 88,592 0.25 1.81 2001 9.73 5.28 73,429 0.25 3.04 2000 10.61 4.46 69,622 0.25 2.19 A Shares 2004(2) $10.05 5.79% $ 3,541 0.55% 1.49% B Shares 2004 $10.03 12.66% $ 13,236 1.00% 0.91% 2003(3) 9.00 12.22 2,691 0.91 0.93 MID-CAP EQUITY FUND T Shares 2004 $10.32 18.70% $ 177,128 1.23% 0.64% 2003 8.74 (10.73) 118,092 1.22 (0.31) 2002 9.79 (10.59) 171,813 1.22 (0.18) 2001 10.95 (6.92) 156,111 1.21 (0.24) 2000 14.10 19.10 206,545 1.17 -- A Shares 2004 $ 9.92 18.16% $ 17,125 1.68% 0.20% 2003 8.42 (11.09) 12,137 1.68 (0.68) 2002 9.47 (11.00) 10,766 1.68 (0.63) 2001 10.64 (7.34) 12,316 1.66 (0.69) 2000 13.82 18.55 14,513 1.62 (0.43) L Shares 2004 $ 9.30 17.51% $ 15,998 2.28% (0.41)% 2003 7.92 (11.71) 12,013 2.28 (1.33) 2002 8.97 (11.54) 13,937 2.28 (1.23) 2001 10.14 (7.88) 12,910 2.26 (1.29) 2000 13.35 17.87 14,588 2.22 (1.05) MID-CAP VALUE EQUITY FUND T Shares 2004 $10.95 27.71% $ 147,185 1.26% 0.53% 2003 8.62 (19.05) 99,854 1.25 0.63 2002(4) 10.95 9.65 174,859 1.27 0.29 A Shares 2004(5) $10.94 16.73% $ 610 1.60% 0.24% L Shares 2004 $10.90 27.06% $ 7,880 1.90% (0.11)% 2003 8.58 (19.58) 5,744 1.90 0.03 2002(4) 10.92 9.24 5,465 1.89 (0.31) SMALL CAP GROWTH STOCK FUND T Shares 2004 $20.25 33.31% $ 789,650 1.25% (0.83)% 2003 15.19 (10.50) 567,714 1.24 (0.87) 2002 17.28 (5.55) 593,211 1.25 (1.01) 2001 18.37 8.33 508,857 1.24 (0.95) 2000 18.30 27.24 431,478 1.20 (0.86) A Shares 2004 $19.92 32.80% $ 40,590 1.61% (1.20)% 2003 15.00 (10.77) 21,887 1.61 (1.23) 2002 17.12 (5.86) 24,978 1.61 (1.37) 2001 18.26 7.89 28,933 1.60 (1.33) 2000(6) 18.27 11.00 39,865 1.55 (1.26) L Shares 2004 $19.06 31.90% $ 40,354 2.31% (1.90)% 2003 14.45 (11.40) 25,601 2.31 (1.93) 2002 16.62 (6.50) 29,457 2.31 (2.07) 2001 17.85 7.19 26,941 2.29 (2.01) 2000 18.00 25.95 23,228 2.25 (1.92)
RATIO OF EXPENSES TO AVERAGE NET ASSETS PORTFOLIO (EXCLUDING WAIVERS TURNOVER AND/OR REIMBURSEMENTS) RATE ---------------------- --------- LIFE VISION MODERATE GROWTH FUND (A) (B) T Shares 2004 0.36% 109% 2003 0.36 101 2002 0.36 202 2001 0.37 247 2000 0.37 151 A Shares 2004(2) 1.27% 109% B Shares 2004 1.56% 109% 2003(3) 1.34 101 MID-CAP EQUITY FUND T Shares 2004 1.26% 126% 2003 1.25 144 2002 1.24 87 2001 1.25 100 2000 1.25 131 A Shares 2004 1.87% 126% 2003 1.92 144 2002 1.89 87 2001 1.86 100 2000 1.81 131 L Shares 2004 2.54% 126% 2003 2.60 144 2002 2.50 87 2001 2.46 100 2000 2.44 131 MID-CAP VALUE EQUITY FUND T Shares 2004 1.36% 95% 2003 1.35 71 2002(4) 1.37 30 A Shares 2004(5) 4.23% 95% L Shares 2004 2.74% 95% 2003 2.85 71 2002(4) 2.72 30 SMALL CAP GROWTH STOCK FUND T Shares 2004 1.25% 107% 2003 1.24 96 2002 1.25 100 2001 1.25 112 2000 1.23 110 A Shares 2004 1.88% 107% 2003 1.93 96 2002 1.88 100 2001 1.87 112 2000(6) 1.79 110 L Shares 2004 2.40% 107% 2003 2.46 96 2002 2.41 100 2001 2.39 112 2000 2.42 110 (A) The Life Vision Funds and its shareholders indirectly bear a pro rata share of the expenses of the underlying STIClassic Funds. The expense ratios do not include such expenses. (B) Recognition of net investment income by the Life Vision Funds is affected by the timing of the declaration of dividends by the STI Classic Funds in which the Life Vision Funds invest. Amounts designated as "--" are either $0 or have been rounded to $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 123 FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31, FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
NET ASSET NET REALIZED AND DIVIDENDS TOTAL VALUE, NET UNREALIZED GAINS TOTAL FROM NET DISTRIBUTIONS DIVIDENDS BEGINNING INVESTMENT (LOSSES) FROM INVESTMENT FROM REALIZED AND OF PERIOD INCOME (LOSS) ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS --------- ------------- ---------------- ---------- ---------- -------------- ------------- SMALL CAP VALUE EQUITY FUND T Shares 2004 $13.73 $ 0.06(1) $ 4.53(1) $ 4.59 $(0.06) $ -- $(0.06) 2003 14.54 0.08 (0.82) (0.74) (0.07) -- (0.07) 2002 12.21 0.08 2.35 2.43 (0.10) -- (0.10) 2001 9.13 0.17 3.07 3.24 (0.16) -- (0.16) 2000 9.70 0.13 (0.59) (0.46) (0.11) -- (0.11) A Shares 2004(2) $15.75 $ 0.03(1) $ 2.41(1) $ 2.44 $(0.01) $ -- $(0.01) L Shares 2004 $13.55 $(0.10)(1) $ 4.46(1) $ 4.36 $ --* $ -- $ --* 2003 14.43 (0.04) (0.84) (0.88) -- -- -- 2002 12.15 -- 2.29 2.29 (0.01) -- (0.01) 2001 9.10 0.07 3.04 3.11 (0.06) -- (0.06) 2000 9.65 -- (0.54) (0.54) (0.01) -- (0.01) STRATEGIC QUANTITATIVE EQUITY FUND T Shares 2004(3) $10.00 $(0.02)(1) $ 2.35(1) $ 2.33 $ -- $(0.25) $(0.25) A Shares 2004(4) $11.35 $(0.05)(1) $ 1.00(1) $ 0.95 $ -- $(0.25) $(0.25) L Shares 2004(5) $11.64 $(0.11)(1) $ 0.72(1) $ 0.61 $ -- $(0.25) $(0.25) TAX SENSITIVE GROWTH STOCK FUND T Shares 2004 $20.78 $(0.06)(1) $ 2.59(1) $ 2.53 $ -- $ -- $ -- 2003 23.25 --(1) (2.47)(1) (2.47) -- -- -- 2002 26.74 (0.02) (3.47) (3.49) -- -- -- 2001 33.10 (0.03) (6.33) (6.36) -- -- -- 2000 29.96 0.02 3.12 3.14 -- -- -- A Shares 2004(6) $22.32 $(0.10)(1) $ 1.04(1) $ 0.94 $ -- $ -- $ -- L Shares 2004 $19.85 $(0.29)(1) $ 2.48(1) $ 2.19 $ -- $ -- $ -- 2003 22.45 (0.20)(1) (2.40)(1) (2.60) -- -- -- 2002 26.10 (0.41) (3.24) (3.65) -- -- -- 2001 32.65 (0.36) (6.19) (6.55) -- -- -- 2000 29.85 (0.16) 2.96 2.80 -- -- -- VALUE INCOME STOCK FUND T Shares 2004 $ 9.73 $ 0.15(1) $ 1.74(1) $ 1.89 $(0.15) $ -- $(0.15) 2003 11.05 0.15 (1.33) (1.18) (0.14) -- (0.14) 2002 11.61 0.12 (0.56) (0.44) (0.12) -- (0.12) 2001 10.38 0.19 1.24 1.43 (0.20) -- (0.20) 2000 12.85 0.23 (1.49) (1.26) (0.22) (0.99) (1.21) A Shares 2004 $ 9.70 $ 0.11(1) $ 1.73(1) $ 1.84 $(0.11) $ -- $(0.11) 2003 11.01 0.12 (1.32) (1.20) (0.11) -- (0.11) 2002 11.58 0.08 (0.56) (0.48) (0.09) -- (0.09) 2001 10.35 0.14 1.25 1.39 (0.16) -- (0.16) 2000 12.81 0.19 (1.48) (1.29) (0.18) (0.99) (1.17) L Shares 2004 $ 9.60 $ 0.03(1) $ 1.72(1) $ 1.75 $(0.04) $ -- $(0.04) 2003 10.90 0.05 (1.31) (1.26) (0.04) -- (0.04) 2002 11.46 -- (0.55) (0.55) (0.01) -- (0.01) 2001 10.24 0.04 1.26 1.30 (0.08) -- (0.08) 2000 12.68 0.08 (1.44) (1.36) (0.09) (0.99) (1.08) * Amount represents less than $0.005. + Returns are for the period indicated and have not been annualized. Total return figures do not include applicable sales loads. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. ++ Ratio reflects the impact of the initial low level of average net assets associated with commencement of operations. (1) Per share data calculated using average shares outstanding method. (2) A Shares were offered beginning on October 9, 2003. All ratios for the period have been annualized. (3) T Shares were offered beginning on August 7, 2003. All ratios for the period have been annualized. (4) A Shares were offered beginning on October 8, 2003. All ratios for the period have been annualized. (5) L Shares were offered beginning on October 13, 2003. All ratios for the period have been annualized. (6) A Shares were offered beginning on October 14, 2003. All ratios for the period have been annualized. Amounts designated as "--" are either $0 or have been rounded to $0.
124 --------------------------------------------------------------------------------
RATIO OF NET ASSET NET ASSETS, RATIO OF NET INVESTMENT VALUE, END TOTAL END OF NET EXPENSES TO INCOME (LOSS) TO OF PERIOD RETURN+ PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS ---------- ------- ------------ ------------------ ------------------ SMALL CAP VALUE EQUITY FUND T Shares 2004 $18.26 33.56% $ 682,567 1.25% 0.38% 2003 13.73 (5.09) 518,468 1.24 0.64 2002 14.54 20.06 614,199 1.25 0.67 2001 12.21 35.90 401,900 1.25 1.72 2000 9.13 (4.72) 212,074 1.22 1.31 A Shares 2004(2) $18.18 15.51% $ 4,088 1.55% 0.30% L Shares 2004 $17.91 32.20% $ 46,192 2.26% (0.64)% 2003 13.55 (6.10) 34,064 2.31 (0.40) 2002 14.43 18.92 32,708 2.31 (0.38) 2001 12.15 34.30 11,167 2.30 0.63 2000 9.10 (5.65) 8,596 2.27 0.21 STRATEGIC QUANTITATIVE EQUITY FUND T Shares 2004(3) $12.08 23.43% $ 66,812 1.13% (0.22)% A Shares 2004(4) $12.05 8.48% $ 155 1.55% (0.67)% L Shares 2004(5) $12.00 5.34% $ 1,573 2.30% (1.42)% TAX SENSITIVE GROWTH STOCK FUND T Shares 2004 $23.31 12.18% $ 144,732 1.25% (0.28)% 2003 20.78 (10.62) 198,429 1.24 (0.01) 2002 23.25 (13.05) 244,707 1.24 (0.10) 2001 26.74 (19.21) 460,311 1.24 (0.10) 2000 33.10 10.48 710,179 1.20 0.13 A Shares 2004(6) $23.26 4.21% $ 365 1.65% (0.71)% L Shares 2004 $22.04 11.03% $ 92,966 2.31% (1.34)% 2003 19.85 (11.58) 110,085 2.31 (1.07) 2002 22.45 (13.98) 167,973 2.31 (1.16) 2001 26.10 (20.06) 233,496 2.30 (1.15) 2000 32.65 9.38 290,595 2.25 (0.91) VALUE INCOME STOCK FUND T Shares 2004 $11.47 19.58% $ 715,928 0.90% 1.40% 2003 9.73 (10.54) 681,899 0.89 1.68 2002 11.05 (3.68) 686,014 0.90 1.13 2001 11.61 14.09 704,842 0.90 1.70 2000 10.38 (10.52) 921,797 0.89 2.02 A Shares 2004 $11.43 19.10% $ 73,257 1.28% 1.01% 2003 9.70 (10.85) 65,294 1.28 1.29 2002 11.01 (4.14) 75,697 1.28 0.74 2001 11.58 13.63 85,584 1.28 1.31 2000 10.35 (10.83) 104,178 1.28 1.64 L Shares 2004 $11.31 18.27% $ 57,403 2.02% 0.27% 2003 9.60 (11.56) 49,007 2.02 0.55 2002 10.90 (4.82) 59,392 2.02 -- 2001 11.46 12.85 65,895 2.01 0.59 2000 10.24 (11.50) 84,563 2.02 0.91
RATIO OF EXPENSES TO AVERAGE NET ASSETS PORTFOLIO (EXCLUDING WAIVERS TURNOVER AND/OR REIMBURSEMENTS) RATE ---------------------- --------- SMALL CAP VALUE EQUITY FUND T Shares 2004 1.25% 44% 2003 1.24 29 2002 1.25 29 2001 1.25 86 2000 1.25 65 A Shares 2004(2) 2.15% 44% L Shares 2004 2.45% 44% 2003 2.50 29 2002 2.52 29 2001 2.66 86 2000 2.56 65 STRATEGIC QUANTITATIVE EQUITY FUND T Shares 2004(3) 1.33% 344% A Shares 2004(4) 10.70%++ 344% L Shares 2004(5) 3.09% 344% TAX SENSITIVE GROWTH STOCK FUND T Shares 2004 1.25% 49% 2003 1.24 58 2002 1.24 69 2001 1.25 103 2000 1.26 30 A Shares 2004(6) 4.48%++ 49% L Shares 2004 2.41% 49% 2003 2.40 58 2002 2.36 69 2001 2.34 103 2000 2.35 30 VALUE INCOME STOCK FUND T Shares 2004 0.90% 67% 2003 0.89 46 2002 0.90 60 2001 0.90 77 2000 0.89 62 A Shares 2004 1.31% 67% 2003 1.32 46 2002 1.31 60 2001 1.31 77 2000 1.28 62 L Shares 2004 2.07% 67% 2003 2.10 46 2002 2.05 60 2001 2.05 77 2000 2.03 62 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 125 NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 1. Organization: The STI Classic Funds (the "Trust") was organized as a Massachusetts business trust under a Declaration of Trust dated January 15, 1992. The Trust is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company offering 45 funds as of May 31, 2004. The financial statements presented herein are those of the Aggressive Growth Stock Fund, the Balanced Fund, the Capital Appreciation Fund, the Emerging Growth Stock Fund, the Growth and Income Fund, the Information and Technology Fund, the International Equity Fund, the International Equity Index Fund, the Life Vision Aggressive Growth Fund, the Life Vision Conservative Fund, the Life Vision Growth and Income Fund, the Life Vision Moderate Growth Fund, the Mid-Cap Equity Fund, the Mid-Cap Value Equity Fund, the Small Cap Growth Stock Fund, the Small Cap Value Equity Fund, the Strategic Quantitative Equity Fund, the Tax Sensitive Growth Stock Fund and the Value Income Stock Fund (each a "Fund" and collectively the "Funds"). The Funds may offer the following share classes: T Shares, A Shares, L Shares and B Shares. The financial statements of the remaining funds are presented separately. The assets of each Fund are segregated, and a shareholder's interest is limited to the Fund in which shares are held. The Funds' prospectus provides a description of the Funds' investment objectives, policies and strategies. Effective April 30, 2004, the Small Cap Value Equity Fund was closed to new investors. 2. Significant Accounting Policies: The following is a summary of significant accounting policies followed by the Trust: USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates. SECURITY VALUATION -- Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ) are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded, or, if there is no such reported sale, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. If available, debt securities are priced based upon valuations provided by independent, third-party pricing agents. Such values generally reflect the last reported sales price if the security is actively traded. The third-party pricing agents may also value debt securities at an evaluated bid price by employing methodologies that utilize actual market transactions, broker-supplied valuations, or other methodologies designed to identify the market value for such securities. Debt obligations with remaining maturities of sixty days or less may be valued at their amortized cost, which approximates market value. The prices for foreign securities are reported in local currency and converted to U.S. dollars using currency exchange rates. Prices for most securities held in the Funds are provided daily by recognized independent pricing agents. If a security price cannot be obtained from an independent, third-party pricing agent, the Funds seek to obtain a bid price from at least one independent broker. Securities for which market prices are not "readily available" are valued in accordance with Fair Value Procedures established by the Funds' Board of Trustees. The Funds' Fair Value Procedures are implemented through a Fair Value Committee (the "Committee") designated by the Funds' Board of Trustees. Some of the more common reasons that may necessitate that a security be valued using Fair Value Procedures include: the security's trading has been halted or suspended; the security has been de-listed from a national exchange; the security's primary trading market is temporarily closed at a time when under normal conditions it would be open; or the security's primary pricing source is not able or willing to provide a price. When a security is valued in accordance with the Fair Value Procedures, the Committee will determine the value after taking into consideration relevant information reasonably available to the Committee. For securities that principally trade on a foreign market or exchange, a significant gap in time can exist between the time of a particular security's last trade and the time at which a Fund calculates its net asset value. The closing prices of such securities may no longer reflect their market value at the time the Fund calculates net asset value if an event that could materially affect the value of those securities (a "Significant Event") has occurred between the time of the security's last close and the time that the Fund calculates net asset value. A Significant Event may relate to a single issuer or to an entire market sector. If the adviser or sub-adviser of a Fund becomes aware of a Significant Event that has occurred with respect to a security or group of securities after the closing of the exchange or market on which the security or securities principally trade, but before the time at which the Fund calculates net asset value, it may request that a Fair Value Committee Meeting be called. In addition, the Funds' administrator monitors price movements among certain selected indices, securities and/or baskets of securities that may be an indicator that 126 -------------------------------------------------------------------------------- the closing prices received earlier from foreign exchanges or markets may not reflect market value at the time the Fund calculates net asset value. If price movements in a monitored index or security exceed levels established by the administrator, the administrator notifies the adviser or sub-adviser for any Fund holding the relevant securities that such limits have been exceeded. In such event, the adviser or sub-adviser makes the determination whether a fair value committee meeting should be called based on the information provided. The assets of the Life Vision Aggressive Growth Fund, the Life Vision Conservative Fund, the Life Vision Growth and Income Fund and the Life Vision Moderate Growth Fund consist of investments in underlying affiliated investment companies, which are valued at their respective daily net asset values. SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are accounted for on the date the security is purchased or sold (trade date). Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Costs used in determining net realized gains and losses on the sales of investment securities are those of the specific securities sold adjusted for the accretion and amortization of purchase discounts and premiums during the respective holding period. Purchase discounts and premiums on securities held by the Funds are accreted and amortized to maturity using the effective interest method. REPURCHASE AGREEMENTS -- In connection with transactions involving repurchase agreements, a third party custodian bank takes possession of the underlying securities ("collateral"), the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. In the event of default on the obligation to repurchase, each Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings. NET ASSET VALUE PER SHARE -- The net asset value per share of each Fund is calculated each business day, by dividing the total value of each Fund's assets, less liabilities, by the number of shares outstanding. The maximum offering price per share for A Shares is equal to the net asset value per share plus a sales load of 3.75%. L Shares of the Funds may be purchased at their net asset value. Shares redeemed within the first year after purchase will be subject to a contingent deferred sales charge ("CDSC") equal to 2% for either the net asset value of the shares at the time of purchase or the net asset value of the shares next calculated after the Fund receives the sale request, whichever is less. The CDSC will not apply to shares redeemed after such time. B Shares of the Funds may be purchased at their net asset value. A CDSC is imposed on certain redemptions of the B Shares. The CDSC varies depending on the number of years from the time of payment for the purchase of B Shares until the redemption of such shares. YEARS AFTER CONTINGENT DEFERRED PURCHASE SALES CHARGE ----------- ------------------- 0 to 1 Year 5% 1 to 2 Years 4% 2 to 3 Years 4% 3 to 4 Years 3% 4 to 5 Years 2% 5 Years + 0% The Funds may charge a redemption fee up to 2% of redemption proceeds, which will automatically be paid to the Fund. There were no redemption fees for the year ended May 31, 2004. FOREIGN CURRENCY TRANSLATION -- The books and records of the International Equity and the International Equity Index Funds are maintained in U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the current rate of exchange; and (ii) purchases and sales of investment securities, income and expenses at the relevant rates of exchange prevailing on the respective dates of such transactions. The International Equity and the International Equity Index Funds do not isolate that portion of gains and losses on investments in equity securities that is due to changes in the foreign exchange rates from that which is due to changes in market prices of equity securities. The International Equity and the International Equity Index Funds report certain foreign currency related transactions as components of realized and unrealized gains and losses for financial reporting purposes, whereas such components are treated as ordinary income for Federal income tax purposes. TBA PURCHASE COMMITMENTS -- The Balanced Fund may enter into "TBA" (To Be Announced) purchase commitments to purchase securities for a fixed price at a future date beyond customary settlement time. TBA purchase commitments may be considered securities in themselves, and involve a risk of loss if the value of the security to be purchased declines prior to settlement date. Unsettled TBA purchase commitments are valued at the current market value of the underlying securities, generally according to the procedures described under "Security Valuation." ILLIQUID SECURITIES -- Valuations of illiquid securities may differ significantly from the values that would have been used had an active market value for these securities existed. 127 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 RESTRICTED SECURITIES -- Certain of the Funds' investments are restricted as to resale. The table below shows the number of shares held, the acquisition date, cost, market value, value per share of such securities and percentage of net assets which the securities comprise as of May 31, 2004:
MARKET VALUE NUMBER ACQUISITION AS OF VALUE % OF OF SHARES DATE COST 05/31/04 PER SHARE NET ASSETS --------- ----------- ---------- ---------- --------- ---------- SMALL CAP GROWTH STOCK FUND InfoCrossing Common Stock $122,000 03/24/04 $1,281,000 $1,481,568 $12.14 0.2% InfoCrossing Warrants 139,109 10/20/03 6,086 742,842 5.34 0.1 Ultimate Software Group 180,000 05/12/04 1,980,000 2,127,960 11.82 0.2
EXPENSES -- Expenses that are directly related to a specific Fund are charged to that Fund. Class specific expenses, such as distribution and transfer agent fees, are borne by that class. Other operating expenses of the Trust are pro-rated to the Funds on the basis of relative net assets. Fund expenses are pro-rated to the respective classes on the basis of relative net assets. In addition to the investment advisory and management fees, custodian fees, service fees, administration and transfer agent fees, each Fund is responsible for paying most other operating expenses including organization costs, fees and expenses of outside trustees, registration fees, printing of shareholder reports, legal, auditing, insurance and other miscellaneous expenses. In addition to the Funds' direct expenses as described above, shareholders of the Life Vision Funds also bear a proportionate share of the underlying Funds' expenses. CLASSES -- Income, non-class specific expenses and realized/unrealized gains and losses are allocated to the respective classes on the basis of the relative daily net assets. OFFERING COSTS -- Offering costs of the Aggressive Growth Stock Fund, the Emerging Growth Stock Fund and the Strategic Quantitative Equity Fund, which commenced operations on February 23, 2004, February 23, 2004 and August 7, 2003, respectively, include costs of printing initial prospectuses and registration fees are being amortized to expenses over twelve months. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and distributions to shareholders, which are determined in accordance with Federal tax regulations are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid each calendar quarter by the Equity Funds, except for the International Equity and the International Equity Index Funds. These Funds distribute income annually. Any net realized capital gains on sales of securities are distributed to shareholders at least annually. COMPENSATING BALANCES -- If a Fund has a cash overdraft in excess of $100,000 it is required to leave 110% in compensating balance with SunTrust Bank (the "Custodian"), a wholly owned subsidiary of SunTrust Banks, Inc., on the following day. If a Fund has a positive cash balance in excess of $100,000 it is allowed to overdraw 90% of the balance with the Custodian on the following business day. 3. Agreements and Other Transactions with Affiliates: INVESTMENT ADVISORY AGREEMENT -- The Trust and Trusco Capital Management, Inc. (the "Investment Adviser"), a wholly owned subsidiary of SunTrust Banks, Inc., have entered into advisory agreements dated May 29, 1992, June 15, 1993 and December 20, 1993 and last amended November 12, 2003. Under terms of the amended agreement, the Funds are charged the following annual fees based upon average daily net assets: MAXIMUM ANNUAL NET FEES ADVISORY FEE PAID ------------ -------- Aggressive Growth Stock Fund ........................ 1.25% 1.10% Balanced Fund ....................................... 0.95 0.92 Capital Appreciation Fund ........................... 1.15 1.13 Emerging Growth Stock Fund .......................... 1.25 1.10 Growth and Income Fund .............................. 0.90 0.90 Information and Technology Fund ..................... 1.10 1.10 International Equity Fund ........................... 1.25 1.25 International Equity Index Fund ..................... 0.90 0.81 Life Vision Aggressive Growth Fund .................. 0.25 0.11 Life Vision Conservative Fund ....................... 0.25 0.10 Life Vision Growth and Income Fund .................. 0.25 0.14 Life Vision Moderate Growth Fund .................... 0.25 0.14 Mid-Cap Equity Fund ................................. 1.15 1.13 Mid-Cap Value Equity Fund ........................... 1.25 1.15 Small Cap Growth Stock Fund ......................... 1.15 1.15 Small Cap Value Equity Fund ......................... 1.15 1.15 Strategic Quantitative Equity Fund .................. 1.15 1.00 Tax Sensitive Growth Stock Fund ..................... 1.15 1.15 Value Income Stock Fund ............................. 0.80 0.80 The Investment Adviser has voluntarily agreed to waive all or a portion of its fees (and to reimburse Fund expenses). Fee waivers and expense reimbursements are voluntary and may be terminated at any time. ADMINISTRATION AGREEMENT -- The Trust and SEI Investments Global Funds Services (the "Administrator") are parties to an Administration Agreement dated May 29, 1995, last amended February 28, 2004, under which the Administrator provides administrative services for an annual fee (expressed as a percentage of the combined average daily net assets of the Trust and STI Classic Variable Trust) of: 0.12% up to $1 billion, 0.09% on the next $4 billion, 0.07% on the next $3 billion, 0.065% on the next $2 billion and 0.06% for over $10 billion. DISTRIBUTION AGREEMENT -- The Trust and SEI Investments Distribution Co. (the "Distributor") are parties to a Distribution Agreement dated November 21, 1995. The Distributor will receive no fees for its distribution services under the plan for the T Shares of any Fund. With respect to the A Shares, L Shares and B Shares, the Distributor receives amounts, pursuant to a Distribution Plan and (in 128 -------------------------------------------------------------------------------- the case of L Shares and B Shares) a Distribution and Service Plan, as outlined in the table below:
MAXIMUM MAXIMUM MAXIMUM L SHARES B SHARES A SHARES DISTRIBUTION DISTRIBUTION DISTRIBUTION NET FEES AND NET FEES AND NET FEES FEE PAID SERVICE FEE PAID SERVICE FEE PAID ------------ -------- ------------ -------- ------------ -------- Aggressive Growth Stock Fund ............ 0.35% 0.25% 1.00% 0.70% --% --% Balanced Fund .......... 0.28 0.11 1.00 0.94 -- -- Capital Appreciation Fund .................. 0.68 0.58 1.00 0.94 -- -- Emerging Growth Stock Fund ............ 0.35 0.25 1.00 0.70 -- -- Growth and Income Fund .................. 0.25 0.07 1.00 0.76 -- -- Information and Technology Fund ....... 0.55 -- 1.00 0.39 -- -- International Equity Fund .................. 0.33 0.11 1.00 0.68 -- -- International Equity Index Fund ............ 0.38 0.35 1.00 0.69 -- -- Life Vision Aggressive Growth Fund ........... 0.50 -- -- -- 1.00 0.19 Life Vision Conservative Fund .................. 0.40 -- -- -- 1.00 0.29 Life Vision Growth and Income Fund ....... 0.50 -- -- -- 1.00 0.50 Life Vision Moderate Growth Fund ........... 0.50 -- -- -- 1.00 0.55 Mid-Cap Equity Fund .................. 0.43 0.26 1.00 0.77 -- -- Mid-Cap Value Equity Fund ........... 0.40 -- 1.00 0.26 -- -- Small Cap Growth Stock Fund ............ 0.50 0.23 1.00 0.91 -- -- Small Cap Value Equity Fund ........... 0.33 -- 1.00 0.81 -- -- Strategic Quantitative Equity Fund ........... 0.25 -- 1.00 0.44 -- -- Tax Sensitive Growth Stock Fund ............ 0.40 -- 1.00 0.91 -- -- Value Income Stock Fund .................. 0.33 0.30 1.00 0.96 -- --
The Distributor has voluntarily agreed to waive all or a portion of their fees (and to reimburse Fund expenses). Fee waivers and expense reimbursements are voluntary and may be terminated at any time. TRANSFER AGENCY AGREEMENTS -- The Trust and Federated Services Company are parties to a Transfer Agency servicing agreement dated May 14, 1994, as amended April 16, 2003, under which Federated Services Company provides transfer agency services to the Trust. The Trust and SunTrust Securities Inc. ("STS"), a wholly-owned subsidiary of SunTrust Banks, Inc., are parties to an agreement under which STS provides certain transfer agency account activity processing and servicing. The transfer agency service fees are based upon a monthly per account charge for the total shareholder accounts at the Trust's transfer agent. These fees are presented on the Statements of Operations as Transfer Agent Shareholder Servicing Fees. CUSTODIAN AGREEMENTS -- SunTrust Bank acts as custodian for all the Funds except the International Equity and the International Equity Index Funds (the "International Funds"), which utilize Brown Brothers Harriman & Co. as custodian. Custodians are paid on the basis of the net assets and transaction costs of the Funds. The custodians play no role in determining the investment policies of the Trust or which securities are to be purchased or sold in the Funds. OTHER -- Certain officers of the Trust are also officers of the Adviser, Administrator and/or the Distributor. Such officers are paid no fees by the Trust for serving as officers of the Trust. The Trust had entered into an agreement with the Distributor to act as an agent in placing repurchase agreements for the Trust. As of October 24, 2003, this agreement was discontinued. For the year ended May 31, 2004, the following Funds paid the Distributor through a reduction in the yield earned by the Funds on those repurchase agreements: FEES -------- Balanced Fund ............................. $3,321 Capital Appreciation Fund ................. 5,709 Information and Technology Fund ........... 103 Mid-Cap EquityFund ........................ 1,137 Mid-Cap Value Equity Fund ................. 2,114 Small Cap Growth Stock Fund ............... 2,828 Small Cap Value Equity Fund ............... 3,967 Tax Sensitive Growth Stock Fund ........... 678 Value Income Stock Fund ................... 7,640 The Trust has entered into an agreement with SunTrust Robinson Humphrey, a division of SunTrust Capital Markets, Inc. which is a direct non-bank subsidiary of SunTrust Banks, Inc. to act as an agent in placing repurchase agreements for the Trust. For the year ended May 31, 2004, the following Funds paid SunTrust Robinson Humphrey, through a reduction in the yield earned by the Funds on those repurchase agreements: FEES -------- Aggressive Growth Stock Fund .............. $ 176 Balanced Fund ............................. 2,047 Capital Appreciation Fund ................. 11,429 Emerging Growth Stock Fund ................ 103 Information and Technology Fund ........... 202 Mid-Cap Equity Fund ....................... 1,589 Small Cap Growth Stock Fund ............... 1,780 Small Cap Value Equity Fund ............... 6,417 Strategic Quantitative Equity Fund ........ 237 Tax Sensitive Growth Stock Fund ........... 1,034 Value Income Stock Fund ................... 10,827 4. Investment Transactions: The cost of purchases and the proceeds from sales and maturities of securities, excluding short-term investments and U.S. Government securities, for the year ended May 31, 2004, were as follows: PURCHASES SALES AND (000) MATURITIES (000) ------------- ---------------- Aggressive Growth Stock Fund .......... $ 19,883 $ 216 Balanced Fund ......................... 257,945 227,763 Capital Appreciation Fund ............. 1,502,071 1,482,461 Emerging Growth Stock Fund ............ 13,644 896 Growth and Income Fund ................ 506,200 428,608 Information and Technology Fund ....... 67,789 73,992 International Equity Fund ............. 240,482 148,464 International Equity Index Fund ....... 53,402 32,537 Life Vision Aggressive Growth Fund .... 23,979 16,458 Life Vision Conservative Fund ......... 9,925 5,316 Life Vision Growth and Income Fund .... 94,192 76,951 Life Vision Moderate Growth Fund ...... 159,678 129,788 Mid-Cap Equity Fund ................... 272,790 232,643 Mid-Cap Value Equity Fund ............. 140,094 119,508 Small Cap Growth Stock Fund ........... 893,339 847,116 Small Cap Value Equity Fund ........... 295,164 280,306 Strategic Quantitative Equity Fund .... 224,707 163,245 Tax Sensitive Growth Stock Fund ....... 130,737 232,824 Value Income Stock Fund ............... 520,124 582,946 The cost of U.S. Government security purchases and the proceeds from the sale of U.S. Government securities from the Balanced Fund during the year ended May 31, 2004 were $119,257 and $134,022, respectively. 129 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 5. Capital Share Transactions: Capital Share Transactions for the Funds were as follows (000):
AGGRESSIVE GROWTH CAPITAL EMERGING GROWTH STOCK FUND BALANCED FUND APPRECIATION FUND STOCK FUND ------------------- --------------------- ------------------- ------------------- 02/23/04*- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 02/23/04*- 05/31/04 05/31/04 05/31/03 05/31/04 05/31/03 05/31/04 ---------- --------------------- -------------------- ---------- T Shares: Shares Issued ......................... 2,062 5,833 5,631 23,848 23,181 1,367 Shares Issued in Lieu of Cash Distributions .................. -- 299 356 -- -- -- Shares Redeemed ....................... (12) (5,342) (6,654) (21,521) (22,631) (24) ------ ------ ------ ------- ------- ------ Net T Share Transactions .............. 2,050 790 (667) 2,327 550 1,343 ------ ------ ------ ------- ------- ------ A Shares (1): Shares Issued ......................... 5 176 94 1,390 2,305 4 Shares Issued in Lieu of Cash Distributions .................. -- 9 12 -- -- -- Shares Redeemed ....................... -- (152) (151) (2,350) (2,724) -- ------ ------ ------ ------- ------- ------ Net A Share Transactions .............. 5 33 (45) (960) (419) 4 ------ ------ ------ ------- ------- ------ L Shares (1): Shares Issued ......................... 7 1,596 1,446 2,046 2,333 5 Shares Issued in Lieu of Cash Distributions .................. -- 31 52 -- -- -- Shares Redeemed ....................... -- (1,944) (1,982) (2,409) (2,752) (1) ------ ------ ------ ------- ------- ------ Net L Share Transactions .............. 7 (317) (484) (363) (419) 4 ------ ------ ------ ------- ------- ------ B Shares (1): Shares Issued ......................... -- -- -- -- -- -- Shares Issued in Lieu of Cash Distributions .................. -- -- -- -- -- -- Shares Redeemed ....................... -- -- -- -- -- -- ------ ------ ------ ------- ------- ------ Net B Share Transactions .............. -- -- -- -- -- -- ------ ------ ------ ------- ------- ------ Net Change in Capital Shares .......... 2,062 506 (1,196) 1,004 (288) 1,351 ====== ====== ====== ======= ======= ======
LIFE VISION LIFE VISION CONSERVATIVE GROWTH AND LIFE VISION MID-CAP EQUITY FUND INCOME FUND MODERATE GROWTH FUND FUND -------------------- -------------------- -------------------- --------------------- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 05/31/04 05/31/03 05/31/04 05/31/03 05/31/04 05/31/03 05/31/04 05/31/03 --------- --------- --------- --------- --------- --------- --------- --------- T Shares (2): Shares Issued ............ 3 -- 2,228 2,189 4,736 4,043 8,504 15,332 Shares Issued in Lieu of Cash Distributions ..... -- -- 95 106 179 189 37 -- Shares Redeemed .......... -- -- (1,716) (3,678) (3,218) (3,260) (4,889) (19,371) ---- --- ------ ------ ------ ------ ------ ------- Net T Share Transactions . 3 -- 607 (1,383) 1,697 972 3,652 (4,039) ---- --- ------ ------ ------ ------ ------ ------- A Shares (2): Shares Issued ............ 45 -- 135 -- 440 -- 721 616 Shares Issued in Lieu of Cash Distributions ..... -- -- -- -- 2 -- 4 -- Shares Redeemed .......... (1) -- (2) -- (90) -- (440) (312) ---- --- ------ ------ ------ ------ ------ ------- Net A Share Transactions . 44 -- 133 -- 352 -- 285 304 ---- --- ------ ------ ------ ------ ------ ------- L Shares (2): Shares Issued ............ -- -- -- -- -- -- 704 468 Shares Issued in Lieu of Cash Distributions ..... -- -- -- -- -- -- 1 -- Shares Redeemed .......... -- -- -- -- -- -- (502) (505) ---- --- ------ ------ ------ ------ ------ ------- Net L Share Transactions . -- -- -- -- -- -- 203 (37) ---- --- ------ ------ ------ ------ ------ ------- B Shares (2): Shares Issued ............ 438 80 1,049 216 1,135 306 -- -- Shares Issued in Lieu of Cash Distributions ..... 4 -- 5 -- 9 -- -- -- Shares Redeemed .......... (58) (3) (54) -- (123) (7) -- -- ---- --- ------ ------ ------ ------ ------ ------- Net B Share Transactions . 384 77 1,000 216 1,021 299 -- -- ---- --- ------ ------ ------ ------ ------ ------- Net Change in Capital Shares 431 77 1,740 (1,167) 3,070 1,271 4,140 (3,772) ==== === ====== ====== ====== ====== ====== ======= * Commencement of Operations. (1) A Shares were offered beginning on October 27, 2003 and October 16, 2003 for the Information and Technology Fund and the Life Vision Aggressive Growth Fund, respectively. L Shares were offered beginning on February 27, 2004 for the Emerging Growth Stock Fund. B Shares were offered beginning on March 11, 2003 for the Life Vision Aggressive Growth Fund. (2) T Shares were offered beginning on November 6, 2003 for the Life Vision Conservative Fund. A Shares were offered beginning on November 11, 2003, November 5, 2003, October 10, 2003, October 27, 2003, October 9, 2003, October 8, 2003 and October 14, 2003 for the Life Vision Conservative Fund, the Life Vision Growth and Income Fund, The Life Vision Moderate Growth
130 --------------------------------------------------------------------------------
GROWTH AND INFORMATION AND INTERNATIONAL INCOME FUND TECHNOLOGY FUND EQUITY FUND ---------------------- --------------------- -------------------- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 05/31/04 05/31/03 05/31/04 05/31/03 05/31/04 05/31/03 --------- --------- --------- --------- --------- --------- T Shares: Shares Issued ......................... 13,896 8,406 812 691 14,743 10,800 Shares Issued in Lieu of Cash Distributions .................. 190 201 -- -- 141 83 Shares Redeemed ....................... (9,941) (17,009) (1,460) (2,728) (6,032) (14,173) ------- ------- ------ ------ ------- ------- Net T Share Transactions .............. 4,145 (8,402) (648) (2,037) 8,852 (3,290) ------- ------- ------ ------ ------- ------- A Shares (1): Shares Issued ......................... 814 1,049 3 -- 2,018 2,102 Shares Issued in Lieu of Cash Distributions .................. 22 21 -- -- 7 3 Shares Redeemed ....................... (697) (766) (3) -- (2,130) (1,869) ------- ------- ------ ------ ------- ------- Net A Share Transactions .............. 139 304 -- -- (105) 236 ------- ------- ------ ------ ------- ------- L Shares (1): Shares Issued ......................... 2,178 1,416 188 156 213 890 Shares Issued in Lieu of Cash Distributions .................. 11 11 -- -- 5 -- Shares Redeemed ....................... (1,603) (2,212) (268) (430) (173) (883) ------- ------- ------ ------ ------- ------- Net L Share Transactions .............. 586 (785) (80) (274) 45 7 ------- ------- ------ ------ ------- ------- B Shares (1): Shares Issued ......................... -- -- -- -- -- -- Shares Issued in Lieu of Cash Distributions .................. -- -- -- -- -- -- Shares Redeemed ....................... -- -- -- -- -- -- ------- ------- ------ ------ ------- ------- Net B Share Transactions .............. -- -- -- -- -- -- ------- ------- ------ ------ ------- ------- Net Change in Capital Shares .......... 4,870 (8,883) (728) (2,311) 8,792 (3,047) ======= ======= ====== ====== ======= =======
INTERNATIONAL LIFE VISION EQUITY INDEX AGGRESSIVE FUND GROWTH FUND --------------------- ---------------------- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 05/31/04 05/31/03 05/31/04 05/31/03 --------- --------- --------- --------- T Shares: Shares Issued ......................... 8,041 7,835 894 625 Shares Issued in Lieu of Cash Distributions .................. 290 108 14 11 Shares Redeemed ....................... (6,365) (7,797) (509) (877) ------ ------ ---- ---- Net T Share Transactions .............. 1,966 146 399 (241) ------ ------ ---- ---- A Shares (1): Shares Issued ......................... 2,436 2,898 85 -- Shares Issued in Lieu of Cash Distributions .................. 14 -- -- -- Shares Redeemed ....................... (2,267) (2,039) -- -- ------ ------ ---- ---- Net A Share Transactions .............. 183 859 85 -- ------ ------ ---- ---- L Shares (1): Shares Issued ......................... 215 600 -- -- Shares Issued in Lieu of Cash Distributions .................. 2 -- -- -- Shares Redeemed ....................... (112) (588) -- -- ------ ------ ---- ---- Net L Share Transactions .............. 105 12 -- -- ------ ------ ---- ---- B Shares (1): Shares Issued ......................... -- -- 334 123 Shares Issued in Lieu of Cash Distributions .................. -- -- 1 -- Shares Redeemed ....................... -- -- (29) -- ------ ------ ---- ---- Net B Share Transactions .............. -- -- 306 123 ------ ------ ---- ---- Net Change in Capital Shares .......... 2,254 1,017 790 (118) ====== ====== ==== ====
MID-CAP SMALL CAP GROWTH SMALL CAP VALUE VALUE EQUITY FUND STOCK FUND EQUITY FUND -------------------- -------------------- -------------------- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 05/31/04 05/31/03 05/31/04 05/31/03 05/31/04 05/31/03 --------- --------- --------- --------- --------- --------- T Shares (2): Shares Issued ............ 5,128 5,129 11,405 10,120 12,101 9,369 Shares Issued in Lieu of Cash Distributions ..... 23 162 -- 487 87 110 Shares Redeemed .......... (3,302) (9,676) (9,774) (7,574) (12,580) (13,947) ------ ------ ------- ------- ------- ------- Net T Share Transactions . 1,849 (4,385) 1,631 3,033 (392) (4,468) ------ ------ ------- ------- ------- ------- A Shares (2): Shares Issued ............ 75 -- 960 541 290 -- Shares Issued in Lieu of Cash Distributions ..... -- -- -- 22 -- -- Shares Redeemed .......... (19) -- (381) (563) (65) -- ------ ------ ------- ------- ------- ------- Net A Share Transactions . 56 -- 579 -- 225 -- ------ ------ ------- ------- ------- ------- L Shares (2): Shares Issued ............ 364 400 812 494 759 1,087 Shares Issued in Lieu of Cash Distributions ..... -- 12 -- 32 -- -- Shares Redeemed .......... (310) (243) (467) (527) (695) (839) ------ ------ ------- ------- ------- ------- Net L Share Transactions . 54 169 345 (1) 64 248 ------ ------ ------- ------- ------- ------- B Shares (2): Shares Issued ............ -- -- -- -- -- -- Shares Issued in Lieu of Cash Distributions ..... -- -- -- -- -- -- Shares Redeemed .......... -- -- -- -- -- -- ------ ------ ------- ------- ------- ------- Net B Share Transactions . -- -- -- -- -- -- ------ ------ ------- ------- ------- ------- Net Change in Capital Shares 1,959 (4,216) 2,555 3,032 (103) (4,220) ====== ====== ======= ======= ======= =======
STRATEGIC QUANTITATIVE TAX SENSITIVE VALUE INCOME EQUITY FUND GROWTH STOCK FUND STOCK FUND ---------------------- -------------------- -------------------- 08/07/03*- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 05/31/04 05/31/04 05/31/03 05/31/04 05/31/03 ---------- --------- --------- --------- --------- T Shares (2): Shares Issued ............ 5,767 474 3,969 11,026 20,952 Shares Issued in Lieu of Cash Distributions ..... 58 -- -- 717 785 Shares Redeemed .......... (296) (3,816) (4,945) (19,413) (13,723) ------ ------ ------ ------- ------- Net T Share Transactions . 5,529 (3,342) (976) (7,670) 8,014 ------ ------ ------ ------- ------- A Shares (2): Shares Issued ............ 13 29 -- 785 1,168 Shares Issued in Lieu of Cash Distributions ..... -- -- -- 67 77 Shares Redeemed .......... -- (13) -- (1,175) (1,386) ------ ------ ------ ------- ------- Net A Share Transactions . 13 16 -- (323) (141) ------ ------ ------ ------- ------- L Shares (2): Shares Issued ............ 138 235 417 1,157 909 Shares Issued in Lieu of Cash Distributions ..... 2 -- -- 19 20 Shares Redeemed .......... (9) (1,562) (2,353) (1,205) (1,272) ------ ------ ------ ------- ------- Net L Share Transactions . 131 (1,327) (1,936) (29) (343) ------ ------ ------ ------- ------- B Shares (2): Shares Issued ............ -- -- -- -- -- Shares Issued in Lieu of Cash Distributions ..... -- -- -- -- -- Shares Redeemed .......... -- -- -- -- -- ------ ------ ------ ------- ------- Net B Share Transactions . -- -- -- -- -- ------ ------ ------ ------- ------- Net Change in Capital Shares 5,673 (4,653) (2,912) (8,022) 7,530 ====== ====== ====== ======= ======= Fund, the Mid-Cap Value Equity Fund, the Small Cap Value Equity Fund, the Strategic Quantitative Equity Fund and the Tax Sensitive Growth Stock Fund, respectively. L Shares were offered beginning on October 13, 2003 for the Strategic Quantitative Equity Fund. B Shares were offered beginning on March 11, 2003 for the Life Vision Conservative Fund, the Life Vision Growth and Income Fund and the Life Vision Moderate Growth Fund, respectively. Amounts designated as "--" are either $0 or have been rounded to $0.
131 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 6. Federal Tax Policies and Information: It is each Fund's intention to continue to qualify as a regulated investment company for Federal income tax purposes and distribute all of its taxable income and net capital gains. Accordingly, no provisions for Federal income taxes are required. The Funds may be subject to taxes imposed by countries in which they invest with respect to their investments in issuer existing or operating in such countries. Such taxes are generally based on income earned. The Funds accrue such taxes when the related income is earned. The timing and characterization of certain income and capital gains distributions are determined annually in accordance with Federal tax regulations which may differ from accounting principles generally accepted in the United States of America. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. These book/tax differences may be temporary or permanent. To the extent these differences are permanent in nature, they are charged or credited to paid-in-capital, undistributed net investment income (loss), or accumulated net realized gain (loss), as appropriate, in the period that the differences arise. Accordingly, the following permanent differences, primarily attributable to net operating losses, the classification of short-term capital gains and ordinary income for tax purposes, PFIC gains, foreign exchange gain, return of capital distribution and paydowns on mortgage-backed securities have been reclassified to/from the following accounts. UNDISTRIBUTED NET ACCUMULATED INVESTMENT REALIZED PAID-IN- INCOME (LOSS) GAIN (LOSS) CAPITAL (000) (000) (000) ------------- ------------ -------- Aggressive Growth Stock Fund ....... $ 16 $ -- $ (16) Balanced Fund ...................... 302 (302) -- Capital Appreciation Fund .......... 5,705 -- (5,705) Emerging Growth Stock Fund ......... 18 -- (18) Information and Technology Fund .... 233 -- (233) International Equity Fund .......... 974 (974) -- International Equity Index Fund .... 480 (480) -- Life Vision Aggressive Growth Fund . 12 -- (12) Small Cap Growth Stock Fund ........ 7,077 (6,215) (862) Strategic Quantitative Equity Fund . 72 (72) -- Tax Sensitive Growth Stock Fund* ... 1,571 -- (1,571) * Information reflects fund activity based on the Fund's October 31, 2003 tax reporting year. Amounts designated as "--" are either $0 or have been rounded to $0. The tax character of dividends and distributions declared during the years ended May 31, 2004 and May 31, 2003 was as follows (000):
ORDINARY LONG-TERM RETURN OF INCOME CAPITAL GAINS CAPITAL TOTALS 2004 2003 2004 2003 2004 2003 2004 2003 ------ ------ ------ ------ ------ ------ ------ ------- Balanced Fund ......... $4,343 $5,021 $-- $-- $-- $-- $4,343 $ 5,021 Growth and Income Fund ........ 7,461 6,686 -- -- -- -- 7,461 6,686 International Equity Fund ......... 3,509 1,452 -- -- -- -- 3,509 1,452 International Equity Index Fund .......... 4,082 1,082 -- -- -- -- 4,082 1,082 Life Vision Aggressive Growth Fund ......... 124 89 -- -- 12 3 136 92 Life Vision Conservative Fund ... 50 -- -- -- -- -- 50 -- Life Vision Growth and Income Fund ......... 1,035 931 -- -- -- -- 1,035 931 Life Vision Moderate Growth Fund ......... 1,846 1,622 -- -- -- -- 1,846 1,622 Mid-Cap Equity Fund ......... 922 -- -- -- -- -- 922 -- Mid-Cap Value Equity Fund ......... 654 2,801 -- -- -- -- 654 2,801 Small Cap Growth Stock Fund .......... -- -- -- 9,104 -- -- -- 9,104 Small Cap Value Equity Fund ......... 2,438 2,605 -- -- -- -- 2,438 2,605 Strategic Quantitative Equity Fund (1) ..... 994 -- -- -- -- -- 994 -- Value Income Stock Fund .......... 10,722 10,325 -- -- -- -- 10,722 10,325
(1) Commenced operations on August 7, 2003. Amounts designated as "--" are either $0 or have been rounded to $0. 132
------------------------------------------------------------------------------------------------------------------------------------ As of May 31, 2004, the components of Distributable Earnings (Accumulated Losses) on a tax basis were as follows (000): UNDISTRIBUTED UNDISTRIBUTED LONG-TERM POST UNREALIZED OTHER ORDINARY CAPITAL CAPITAL LOSS OCTOBER APPRECIATION TEMPORARY INCOME GAINS CARRYFORWARDS LOSS (DEPRECIATION) DIFFERENCES TOTAL ------------- ------------- ------------- ------- -------------- ----------- --------- Aggressive Growth Stock Fund ........ $ -- $ -- $ (29) $ -- $ 379 $ (5) $ 345 Balanced Fund ....................... 894 2,650 -- -- 13,473 -- 17,017 Capital Appreciation Fund ........... -- 26,174 -- -- 137,423 -- 163,597 Emerging Growth Stock Fund .......... -- -- (178) -- (39) (6) (223) Growth and Income Fund .............. 1,551 -- (29,765) -- 166,753 -- 138,539 Information and Technology Fund ..... -- -- (84,692) -- 1,900 -- (82,792) International Equity Fund ........... 3,026 -- (85,094) (1,599) 43,106 -- (40,561) International Equity Index Fund ..... 5,627 -- (55,813) (355) 18,942 -- (31,599) Life Vision Aggressive Growth Fund .. -- -- (971) (5) 2,696 -- 1,720 Life Vision Conservative Fund ....... 32 1 -- -- 102 -- 135 Life Vision Growth and Income Fund .. 133 -- (3,887) -- 7,616 -- 3,862 Life Vision Moderate Growth Fund .... 341 -- (2,245) -- 9,396 -- 7,492 Mid-Cap Equity Fund ................. 78 -- (28,717) -- 22,506 -- (6,133) Mid-Cap Value Equity Fund ........... 142 -- (17,070) -- 16,776 -- (152) Small Cap Growth Stock Fund ......... 33,850 28,437 (1,996) -- 161,518 -- 221,809 Small Cap Value Equity Fund ......... 1,083 41,674 -- -- 172,416 -- 215,173 Strategic Quantitative Fund ......... 3,039 -- -- -- 2,972 (18) 5,993 Tax Sensitive Growth Stock Fund ..... -- -- (237,645) -- 54,435 (1,149) (184,359) Value Income Stock Fund ............. 2,013 -- (191,692) -- 104,785 -- (84,894) Amounts designated as "--" are either $0 or have been rounded to $0. Post-October losses represent losses realized on investment and foreign currency transactions from November 1, 2003 through May 31, 2004 that, in accordance with Federal income tax regulations, the Fund may elect to defer and treat as having arisen in the following fiscal year. For tax purposes, the losses in the Funds can be carried forward for a maximum of eight years to offset any future net realized capital gains. The Funds had capital loss carryforwards at May 31, 2004 as follows (000):
EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING 2006 2007 2008 2009 2010 2011 2012 TOTAL -------- -------- -------- -------- -------- -------- -------- -------- Aggressive Growth Stock Fund ............... $ -- $ -- $ -- $ -- $ -- $ -- $ 29 $ 29 Emerging Growth Stock Fund ................. -- -- -- -- -- -- 178 178 Growth and Income Fund ..................... -- -- -- -- -- 29,765 -- 29,765 Information and Technology Fund ............ -- -- -- -- 65,590 19,102 -- 84,692 International Equity Fund .................. 3,868 2,086 -- 3,394 27,543 31,153 17,050 85,094 International Equity Index Fund ............ -- -- -- 6,233 23,827 16,546 9,207 55,813 Life Vision Aggressive Growth Fund ......... -- -- -- -- 15 873 83 971 Life Vision Growth and Income Fund ......... -- -- -- -- 1,545 1,299 1,043 3,887 Life Vision Moderate Growth Fund ........... -- -- -- -- 586 554 1,105 2,245 Mid-Cap Equity Fund ........................ -- -- -- -- -- 28,717 -- 28,717 Mid-Cap Value Equity Fund .................. -- -- -- -- -- 17,070 -- 17,070 Small Cap Growth Stock Fund ................ -- 1,996 -- -- -- -- -- 1,996 Tax Sensitive Growth Stock Fund* ........... -- 142 40,227 153,993 52,653 9,527 -- 256,542 Value Income Stock Fund .................... -- -- -- 162,750 -- 28,942 -- 191,692 * Information reflects fund activity based on the Fund's October 31, 2003 tax reporting year. Amounts designated as "--" are either $0 or have been rounded to $0.
133 NOTES TO FINANCIAL STATEMENTS (concluded) -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 During the year ended May 31, 2004, the Balanced Fund, Capital Appreciation Fund, Growth and Income Fund, Information and Technology Fund, Mid-Cap Equity Fund, Mid-Cap Value Equity Fund, Small Cap Growth Stock Fund, Small Cap Value Equity Fund and the Value Income Stock Fund utilized (in 000s) $15,343, $109,593, $27,030, $3,883, $22,262, $4,100, $49,367, $25,211 and $21,505 in capital loss carryforwards, respectively. Included in the Small Cap Growth Stock Fund is $1,996,446 of capital loss carryforwards acquired in a previous merger. The annual utilization of this capital loss carryover is limited pursuant to Internal Revenue Code Section 382. At May 31, 2004, the total cost of securities and the net realized gains or losses on securities sold for Federal income tax purposes were different from amounts reported for financial reporting purposes due to wash sales which cannot be used for Federal income tax purposes in the current year and have been deferred for use in future years. The aggregate gross unrealized appreciation and depreciation for securities held by the Funds at May 31, 2004, were as follows:
AGGREGATE AGGREGATE NET GROSS GROSS UNREALIZED FEDERAL UNREALIZED UNREALIZED APPRECIATION TAX COST APPRECIATION (DEPRECIATION) (DEPRECIATION) (000) (000) (000) (000) ---------- ------------ -------------- -------------- Aggressive Growth Stock Fund ........ $ 20,316 $ 957 $ (578) $ 379 Balanced Fund ....................... 303,363 20,301 (6,828) 13,473 Capital Appreciation Fund ........... 1,361,148 174,235 (36,812) 137,423 Emerging Growth Stock Fund .......... 13,123 595 (634) (39) Growth and Income Fund .............. 754,979 175,601 (8,848) 166,753 Information and Technology Fund ..... 15,476 2,361 (461) 1,900 International Equity Fund ........... 352,129 6,217 (49,270) 43,053 International Equity Index Fund ..... 416,684 30,544 (11,687) 18,857 Life Vision Aggressive Growth Fund .. 40,980 4,475 (1,779) 2,696 Life Vision Conservative Fund ....... 5,465 204 (102) 102 Life Vision Growth and Income Fund .. 81,942 9,154 (1,538) 7,616 Life Vision Moderate Growth Fund .... 129,072 13,756 (4,360) 9,396 Mid-Cap Equity Fund ................. 193,979 25,748 (3,242) 22,506 Mid-Cap Value Equity Fund ........... 171,207 18,583 (1,807) 16,776 Small Cap Growth Stock Fund ......... 1,039,287 196,444 (34,926) 161,518 Small Cap Value Equity Fund ......... 634,927 191,211 (18,795) 172,416 Strategic Quantitative Equity Fund .. 66,016 3,418 (446) 2,972 Tax Sensitive Growth Stock Fund ..... 184,749 57,095 (2,660) 54,435 Value Income Stock Fund ............. 755,008 114,570 (9,785) 104,785
7. Concentrations/Risks: The Information and Technology Fund invests a substantial portion of its assets in securities in the technology industry. Therefore, it may be more affected by economic and political developments in that industry than a general equity fund would be. The International Equity and International Equity Index Funds invest in securities of foreign issuers in various countries. These investments may involve certain considerations and risks not typically associated with investments in the United States as a result of, among other factors, the possibility of future political and economic developments and the level of governmental supervision and regulation of securities markets in the respective countries. In the normal course of business, the Funds enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on future claims that may be made against the Funds and, therefore, cannot be estimated; however, based on experience, the risk of loss from such claims is considered remote. 8. Securities Lending Each Fund may lend portfolio securities to brokers, dealers and other financial organizations that meet capital and other credit requirements or other criteria established by the Trust's Board of Trustees. These loans may not exceed 331/3% of the total asset value of the Fund (including the loan collateral). No Fund will lend portfolio securities to its investment adviser, or its affiliates unless it has applied for and received specific authority to do so from the Securities and Exchange Commission. Loans of portfolio securities will be fully collateralized by cash. The value of the collateral is at least equal to the market value of the securities loaned. However, due to market fluctuations during the day, the value of securities loaned on a particular day may, during the course of the day, exceed the value of collateral. On each business day, the amount of collateral is adjusted based on the prior day's market fluctuations and the current day's lending activity. Income from lending activity is determined by the amount of interest earned on collateral, less any amounts payable to the borrowers of the securities and the lending agent. Lending securities involves certain risks, including the risk that the Fund may be delayed or prevented from recovering the collateral if the borrower fails to return the securities. Cash collateral received in connection with securities lending is invested in the Boston Global Investment Trust-Enhanced Portfolio. This investment consists of money market instruments including money market mutual funds registered under the Investment Company Act of 1940, commercial paper, repurchase agreements, U.S. Treasury Bills and U.S. agency obligations. 9. Subsequent Event Effective July 26, 2004, under separate administration, distribution and transfer agency agreements dated July 24, 2004, July 24, 2004 and July 23, 2004, respectively, BISYS Fund Services began providing administration, distribution and transfer agency services for the Funds. 134 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 To the Board of Trustees and Shareholders of STI Classic Funds: In our opinion, the accompanying statements of net assets of Aggressive Growth Stock Fund, Balanced Fund, Capital Appreciation Fund, Emerging Growth Stock Fund, Growth and Income Fund, Information and Technology Fund, International Equity Fund, International Equity Index Fund, Life Vision Aggressive Growth Fund, Life Vision Conservative Fund, Life Vision Growth and Income Fund, Life Vision Moderate Growth Fund, Mid-Cap Equity Fund, Mid-Cap Value Equity Fund, Small Cap Growth Stock Fund, Small Cap Value Equity Fund, Tax Sensitive Growth Stock Fund and Value Income Stock Fund, and the statement of assets and liabilities, including the schedule of investments, of Strategic Quantitative Equity Fund (nineteen of the forty-five funds constituting STI Classic Funds, hereafter referred to as the "Funds") and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Funds at May 31, 2004, the results of each of their operations for the year (or period) then ended, the changes in each of their net assets for each of the two years (or periods) then ended and the financial highlights for each of the three years (or periods) then ended, for the Life Vision Conservative Fund its financial highlights for each of the two years (or periods) then ended, and for Aggressive Growth Stock Fund, Emerging Growth Stock Fund and Strategic Quantitative Equity Fund the changes in each of their net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States), which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at May 31, 2004 for International Equity Fund and International Equity Index Fund by correspondence with the custodian and brokers, and physical inspection of securities at May 31, 2004 for all other funds, provide a reasonable basis for our opinion. The financial highlights for each of the two years (or periods) ended May 31, 2001 were audited by other independent accountants who have ceased operations. Those independent accountants expressed an unqualified opinion on those financial statements in their report dated July 18, 2001. PricewaterhouseCoopers LLP Philadelphia, Pennsylvania July 26, 2004 135
TRUSTEES AND OFFICERS OF THE STI CLASSIC FUNDS ------------------------------------------------------------------------------------------------------------------------------------ Information pertaining to the trustees and officers of the Trust is set forth below. Trustees who are not deemed to be "interested persons" of the Trust as defined in the 1940 Act are referred to as "Independent Board Members." Trustees who are deemed to be "interested persons" of the Trust are referred to as "Interested Board Members." Messrs. Courts and Ridley are Trustees who may be deemed to be "interested" persons of the Trust. ------------------------------------------------------------------------------------------------------------------------------------ TERM OF NUMBER OF OFFICE PORTFOLIOS AND PRINCIPAL IN STI CLASSIC NAME POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX OTHER DIRECTORSHIPS ADDRESS, HELD WITH TIME DURING PAST OVERSEEN BY HELD BY AND AGE(1) THE TRUST SERVED(2) 5 YEARS BOARD MEMBER(3) BOARD MEMBER(4) ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED BOARD MEMBERS(5) ---------------- Richard W. Courts, II, Trustee Since Chairman of the Board, Atlantic 52 Current Trustee of STI 68 November, Investment Company, 1970 to the Classic Variable Trust. 2001 present. ------------------------------------------------------------------------------------------------------------------------------------ Clarence H. Ridley, 62 Trustee Since Chairman of the Board; Haverty 52 Current Trustee of STI November, Furniture Companies, 2001 to the Classic Variable Trust. 2001 present; Partner, King and Spaulding LLP (law firm), 1971 to 2000. ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT BOARD MEMBERS -------------- Thomas Gallagher, 56 Trustee Since President, Genuine Parts Company 52 Director, National Service May, 2000 Wholesale Distribution, 1970 to the Industries; Director, Oxford present. Industries. Current Trustee of STI Classic Variable Trust. ------------------------------------------------------------------------------------------------------------------------------------ F. Wendell Gooch, 71 Trustee Since Retired. 52 Current Trustee on the Board May, 1992 Board of Trustees for the SEI Family of Funds, The Capitol Mutual Funds and STI Classic Variable Trust. ------------------------------------------------------------------------------------------------------------------------------------ James O. Robbins, 62 Trustee Since President and Chief Executive 52 Director, NCR; Director, May, 2000 Officer, Cox Communications, Inc., Cox Communications, 1983 to the present. Current Trustee of STI Classic Variable Trust. ------------------------------------------------------------------------------------------------------------------------------------ Jonathan T. Walton, 74 Trustee Since Retired. 52 Trustee, W.K. Kellogg Trust. February, Current Trustee of STI 1998 Classic Variable Trust. ------------------------------------------------------------------------------------------------------------------------------------
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------------------------------------------------------------------------------------------------------------------------------------ (UNAUDITED) ------------------------------------------------------------------------------------------------------------------------------------ TERM OF NUMBER OF OFFICE PORTFOLIOS AND PRINCIPAL IN STI CLASSIC NAME POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX OTHER DIRECTORSHIPS ADDRESS, HELD WITH TIME DURING PAST OVERSEEN BY HELD BY AND AGE(1) THE TRUST SERVED 5 YEARS BOARD MEMBER BOARD MEMBER ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS -------- James F. Volk, President Since SEI Investments since 1996; N/A N/A 41 November, Senior Operations Officer Fund 2000 Accounting and Administration, 1996-2004, Chief Accounting Officer, present; Assistant Chief Accountant, U.S. Securities and Exchange Commission, 1993- 1996; Audit Manager, Coopers & Lybrand LLP, 1985-1993. ------------------------------------------------------------------------------------------------------------------------------------ Timothy D. Barto, Vice Since SEI Investments since 1999; N/A N/A 36 President November, General Counsel, Vice President and 2001 and Secretary of the Administrator Secretary and Adviser, present; Associate, Dechert, Price & Rhodes, 1997-1999. ------------------------------------------------------------------------------------------------------------------------------------ Lydia A. Gavalis, Vice Since SEI Investments since 1998; Vice N/A N/A 40 President May, 1998 President and Assistant Secretary and of the Administrator and Adviser, Assistant present; Assistant General Counsel Secretary and Director of Arbitration, Philadelphia Stock Exchange, 1989-1998. ------------------------------------------------------------------------------------------------------------------------------------ Christine M. Vice Since SEI Investments since 1999; Vice N/A N/A McCullough, President May, 2000 President and Assistant Secretary 43 and of the Adviser, present; Associate, Assistant White and Williams LLP, Secretary 1991-1999. ------------------------------------------------------------------------------------------------------------------------------------ William E. Vice Since SEI Investments since 2000; N/A N/A Zitelli Jr., President November, Assistant Secretary of the 35 and 2000 Administrator and Adviser, Assistant present; Vice President, Merrill Secretary Lynch & Co. Asset Management Group, 1998-2000; Associate, Pepper Hamilton LLP, 1997-1998. ------------------------------------------------------------------------------------------------------------------------------------ 1 Each trustee and officer may be contacted by writing to c/o STI Classic Funds, SEI Investments Company, Oaks, PA 19456. 2 Each trustee shall hold office during the lifetime of this Trust until the election and qualification of his or her successor, or until he or she sooner dies, resigns or is removed in accordance with the Trust's Declaration of Trust. 3 The "STI Classic Complex" consists of all registered investment companies for which Trusco Capital Management, Inc. serves as investment adviser. As of May 31, 2004, the STI Classic Complex consisted of 52 Funds. 4 Directorships of companies required to report to the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934 (i.e., "public companies") or other investment companies registered under the 1940 Act. 5 Mr. Courts is deemed an interested trustee because of his directorships with affiliates of the Adviser. Mr. Ridley is deemed an interested trustee because of his material business relationships with the parent to the Adviser.
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TRUSTEES AND OFFICERS OF THE STI CLASSIC FUNDS (concluded) ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ TERM OF NUMBER OF OFFICE PORTFOLIOS AND PRINCIPAL IN STI CLASSIC NAME POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX OTHER DIRECTORSHIPS ADDRESS, HELD WITH TIME DURING PAST OVERSEEN BY HELD BY AND AGE(1) THE TRUST SERVED 5 YEARS BOARD MEMBER BOARD MEMBER ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS (CONTINUED) -------- Douglas Phillips, Vice Since President, Chief Executive Officer N/A N/A 56 President August, and Chief Investment Officer and 2003 of Trusco Capital Management, Assistant Inc. since its inception in Secretary November 1984. ------------------------------------------------------------------------------------------------------------------------------------ Deborah A. Lamb, Vice Since Chief Compliance Officer and N/A N/A 51 President November, Vice President of Trusco Capital and 2003 Management, Inc. since March Assistant 2003 and President of Investment Secretary Industry Consultants, LLC since June 2000. Director of Compliance at INVESCO, Inc. from March 1995 to June 2000. ------------------------------------------------------------------------------------------------------------------------------------ Kathleen Lentz, Vice Since Vice President and Manager of N/A N/A 43 President November, Special Entities in Financial and 2003 Intelligence Unit of SunTrust Assistant Bank since 2002. Vice President Secretary of the Third Party Mutual Funds Unit of SunTrust Bank, 1996-2002. ------------------------------------------------------------------------------------------------------------------------------------ John Munera, Vice Since Middle Office Compliance Officer N/A N/A 41 President November, at SEI Investments since 2000. and 2003 Supervising Examiner at Federal Assistant Reserve Bank of Philadelphia Secretary 1998-2000. ------------------------------------------------------------------------------------------------------------------------------------ Jennifer E. Spratley, Treasurer Since Funds Accounting Director, SEI N/A N/A 35 and May, 2000 Investments, 1999-present; Audit CFO Manager, Ernst & Young LLP, 1991-1999. ------------------------------------------------------------------------------------------------------------------------------------ 1 Each officer may be contacted by writing to c/o STI Classic Funds, SEI Investments Company, Oaks, PA 19456.
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NOTICE TO SHAREHOLDERS ----------------------------------------------------------------------------------------------------------------------- STI CLASSIC EQUITY FUNDS MAY 31, 2004 (UNAUDITED) For the shareholder that do not have a May 31, 2004 tax year end, this notice is for informational purposes only. For shareholders with a May 31, 2004 tax year end, please consult your tax advisor as to the pertinence of this notice. For the fiscal year ended May 31, 2004, each Fund is designating the following items with regard to distributions paid during the year: DIVIDENDS LONG TERM QUALIFYING (20% RATE) RETURN ORDINARY FOR CORPORATE CAPITAL GAIN OF CAPITAL INCOME TOTAL DIVIDENDS REC. FUND DISTRIBUTION DISTRIBUTION DISTRIBUTIONS DISTRIBUTIONS DEDUCTIONS (1) ---- ------------ ------------ ------------- ------------- -------------- Aggressive Growth Stock Fund ............ 0.00% 0.00% 00.00% 00.00% 00.00% Balanced Fund ........................... 0.00% 0.00% 100.00% 100.00% 30.75% Capital Appreciation Fund ............... 0.00% 0.00% 00.00% 00.00% 00.00% Emerging Growth Stock Fund .............. 0.00% 0.00% 00.00% 00.00% 00.00% Growth and Income Fund .................. 0.00% 0.00% 100.00% 100.00% 100.00% Information and Technology Fund ......... 0.00% 0.00% 00.00% 00.00% 00.00% International Equity Fund ............... 0.00% 0.00% 100.00% 100.00% 00.00% International Equity Index Fund ......... 0.00% 0.00% 100.00% 100.00% 00.00% Life Vision Aggressive Growth Fund ...... 0.00% 8.63% 91.37% 100.00% 00.00% Life Vision Conservative Fund ........... 0.00% 0.00% 100.00% 100.00% 00.00% Life Vision Growth and Income Fund ...... 0.00% 0.00% 100.00% 100.00% 00.00% Life Vision Moderate Growth Fund ........ 0.00% 0.00% 100.00% 100.00% 00.00% Mid-Cap Equity Fund ..................... 0.00% 0.00% 100.00% 100.00% 100.00% Mid-Cap Value Equity Fund ............... 0.00% 0.00% 100.00% 100.00% 100.00% Small Cap Growth Stock Fund ............. 0.00% 0.00% 00.00% 00.00% 00.00% Small Cap Value Equity Fund ............. 0.00% 0.00% 100.00% 100.00% 99.98% Strategic Quantitative Fund ............. 0.00% 0.00% 100.00% 100.00% 5.74% Tax Sensitive Growth Stock Fund (4) ..... 0.00% 0.00% 0.00% 0.00% 0.00% Value Income Stock Fund ................. 0.00% 0.00% 100.00% 100.00% 100.00% --------------------- (1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction and is reflected as a percentage of "Ordinary Income Distributions." (2) The percentage in this column represents the amount of "Qualifying Dividend Income" as created by the Jobs and Growth Tax Relief Reconciliation Act of 2003 and is reflected as a percentage of "Ordinary Income Distributions." It is the intention of each of the aforementioned Funds to designate the maximum amount permitted by the law. (3) Foreign tax credit pass through represents the amount eligible for the foreign tax credit and is reflected as a percentage of "Ordinary Income Distributions." (4) Information reflects fund activity based on the Fund's October 31, 2003 tax reporting year. -----------------------------------------------------------------------------------------------------------------------
QUALIFYING DIVIDEND FOREIGN INCOME TAX (15% TAX RATE WITHHOLDING FUND FOR QDI) (2) PASS THROUGH (3) ---- ------------- ---------------- Aggressive Growth Stock Fund ............ 00.00% 0.00% Balanced Fund ........................... 35.86% 0.00% Capital Appreciation Fund ............... 00.00% 0.00% Emerging Growth Stock Fund .............. 00.00% 0.00% Growth and Income Fund .................. 100.00% 0.00% Information and Technology Fund ......... 00.00% 0.00% International Equity Fund ............... 100.00% 18.32% International Equity Index Fund ......... 61.66% 18.41% Life Vision Aggressive Growth Fund ...... 100.00% 0.00% Life Vision Conservative Fund ........... 4.49% 0.00% Life Vision Growth and Income Fund ...... 34.30% 0.00% Life Vision Moderate Growth Fund ........ 15.51% 0.00% Mid-Cap Equity Fund ..................... 100.00% 0.00% Mid-Cap Value Equity Fund ............... 100.00% 0.00% Small Cap Growth Stock Fund ............. 00.00% 0.00% Small Cap Value Equity Fund ............. 100.00% 0.00% Strategic Quantitative Fund ............. 5.22% 0.00% Tax Sensitive Growth Stock Fund (4) ..... 0.00% 0.00% Value Income Stock Fund ................. 100.00% 0.00% 139 NOTES -------------------------------------------------------------------------------- INVESTMENT ADVISER Trusco Capital Management, Inc. STI Classic Funds are not deposits, are not insured or guaranteed by the FDIC or any other government agency, and are not endorsed by and do not constitute obligations of SunTrust Banks, Inc. or any other of its affiliates. Investment in the Funds involves risk, including the possible loss of principal. There is no guarantee that any STI Classic Fund will achieve its investment objective. The STI Classic Funds are advised by an affiliate of SunTrust Banks, Inc. DISTRIBUTOR SEI Investments Distribution Co. This information must be preceded or accompanied by a current prospectus for each Fund described. Information regarding the Adviser, and thus the Funds' Proxy Voting Policies and Procedures are provided in the Statement of Additional Information. A copy of the Proxy Voting Policies and Procedures may be obtained by contacting the STI Classic Funds at 1-800-874-4770, option 5, or by visiting STIClassicFunds.com. Beginning no later than August 31, 2004, information (if any) regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge (i) by calling 1-800-874-4770. [STI Classic LOGO OMITTED] BACKED BY TRADITION. STRENGTHENED BY EXPERIENCE.SM STI-AR-001-004 ITEM 2. CODE OF ETHICS. The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer, officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's Board of Trustees has determined that the Board's Audit Committee does not have an "audit committee financial expert," as the Securities and Exchange Commission has defined that term. After carefully considering all of the factors involved in the definition of "audit committee financial expert," the Board determined that none of the members of the audit committee met all five qualifications in the definition, although some members of the Audit Committees met some of the qualifications. The Board also determined that the Audit Committee members collectively have many years of experience in business and finance, including working with mutual fund financial statements and auditors, and that in light of the nature of the accounting and valuation issues the registrant's portfolios have presented over the past several years, it did not appear that the Audit Committee members lacked any necessary skill to serve on the Audit Committee. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Fees billed by PricewaterhouseCoopers LLP ("PWC") related to the Trust PWC billed the Trust aggregate fees for services rendered to the Trust for the last two fiscal years as follows:
-------------------------------------------------------------------------------------------------------------------------------- 2004 2003 -------------------------------------------------------------------------------------------------------------------------------- All fees and All fees and All other fees All fees and All fees and All other fees services to the services to and services to services to the services to and services to Trust that were service service Trust that were service service pre-approved affiliates that affiliates that pre-approved affiliates that affiliates that were did not require were did not require pre-approved pre-approval pre-approved pre-approval -------------------------------------------------------------------------------------------------------------------------------- (a) Audit $ 563,000 N/A $ 0 $ 448,509 N/A $ 0 Fees(1) -------------------------------------------------------------------------------------------------------------------------------- (b) Audit- $ 72,000 (2) $ 60,000 (3) $ 1,795,277 (4) $ 61,500 (2) $ 0 $ 1,498,453 (4) Related Fees -------------------------------------------------------------------------------------------------------------------------------- (c) Tax Fees $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 -------------------------------------------------------------------------------------------------------------------------------- (d) All $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Other Fees --------------------------------------------------------------------------------------------------------------------------------
Notes: (1) Audit fees include amounts related to the audit of the registrant's annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings. (2) Services related to security count examinations under Rule 17f-2 of the Investment Company Act for 2004 and 2003 fiscal years. (3) Services related to the audit of the controls around custody operations at SunTrust Bank (SAS No. 70) in 2003. (4) Non-audit services relate principally to certain technical accounting advice on financial products of the Bank; Sarbanes-Oxley 404 implementation; and, tax compliance services to other entities controlled by SunTrust Banks, Inc. (e)(1) The registrant has adopted an Audit and Non-Audit Services Pre-Approval Policy, as follows: I. Statement of Principles As set forth in the chart below, the Sarbanes-Oxley Act of 2002 (the "Act"), and rules adopted by the Securities and Exchange Commission ("SEC") require that the Audit Committee of the Board of Trustees pre-approve all audit services and non-audit services provided to the STI Classic Funds and the STI Classic Variable Trust (the "Trusts") and their respective portfolios (the "Funds") by its independent accountant ("Auditor"),1 as well as non-audit services provided by the Auditor to the Funds' investment adviser and to affiliates of the adviser that provide ongoing services to the Funds ("Service Affiliates") if the services directly impact the Funds' operations and financial reporting.
WHERE PRE-APPROVAL IS REQUIRED -------------------------------------------------------------------------------------------------------- AUDIT SERVICE NON-AUDIT SERVICE -------------------------------------------------------------------------------------------------------- Fund Yes Yes -------------------------------------------------------------------------------------------------------- Adviser No Yes, if directly related to Fund operation and financial reporting -------------------------------------------------------------------------------------------------------- Service Affiliate 2 No Yes, if directly related to Fund operation and financial reporting --------------------------------------------------------------------------------------------------------
The following policies and procedures govern the ways in which the Audit Committee will pre-approve audit and various types of non-audit services that the Auditor provides to the Trusts and to Service Affiliates. These policies and procedures do not apply in the case of audit services that the Auditor provides to Service Affiliates, nor do they apply to services that an audit firm other than the Auditor provides to such entities. -------------------------------------------------------------------------------- 1 The Audit Committee also is permitted to ratify the provision of inadvertent non-audit services, BUT ONLY IF: o the value of all such services do not exceed 5% of total revenues paid by the Fund, the Adviser and Service Affiliates to the Auditor in the fiscal year when services are provided; 1 o the services were not recognized as non-audit services at the time they were provided; and o the services are promptly brought to the attention of the Audit Committee and approved prior to the completion of the audit. 2 A list of Service Affiliates is set out in Exhibit I, attached hereto. These policies and procedures comply with the requirements for pre-approval, but also provide a mechanism by which management of the Trusts may request and secure pre-approval of audit and non-audit services in an orderly manner with minimal disruption to normal business operations. Pre-approval of non-audit services may be achieved through a combination of the procedures described in Sections II and VI below. II. Delegation As contemplated by the Act and applicable SEC rules, the Audit Committee hereby delegates to the Chairperson of the Audit Committee the authority to approve the engagement of the independent auditor to provide non-audit services as permitted by the Act, to the extent that such non-audit services are not pre-approved by the entire Audit Committee as set forth herein. The Chairman shall report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next scheduled meeting. III. Audit Services The annual Audit services engagement scope and terms will be subject to the specific pre-approval of the Audit Committee. Audit services include the annual financial statement audit (including required rating agency reviews) and other procedures required to be performed by the independent auditor to be able to form an opinion on the Trusts' financial statements. The Audit Committee will monitor the Audit services engagement throughout the year and will also approve, if necessary, any changes in terms and conditions resulting from changes in audit scope, Fund structure or other items. The Audit Committee will pre-approve all Audit services for the Trusts. IV. Audit-related Services Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the Trusts' financial statements or that are traditionally performed by the Auditor. The Audit Committee will pre-approve all Audit-related services for the Trusts. V. Tax Services Tax services to the Trusts include tax compliance, tax planning and tax advice. The Audit Committee will review all proposed tax related services to assure that their provision would not impair the independence of the Auditor. The Audit Committee will pre-approve all tax services for the Trusts. VI. All Other Services The Audit Committee believes, based on the SEC's rules prohibiting the independent auditor from providing specific non-audit services, 3 that other types of non-audit services are permitted. Accordingly, the Audit Committee believes it may pre-approve those permissible non-audit services classified as All Other Services that it believes would not impair the independence of the auditor, and are consistent with the SEC's rules on auditor independence. The Audit Committee will pre-approve all other services for the Trusts. -------------------------------------------------------------------------------- 3 A list of specific prohibited non-audit services is set out in Exhibit II, attached hereto. VII. Procedures Annually, the Audit Committee will review and approve the types of services to be provided by the Auditor and review the projected fees for the next fiscal year at a regularly scheduled meeting. That approval will acknowledge that the Audit Committee is in agreement with the specific types of services that the Auditor will be permitted to perform. If subsequent to the annual approval by the Audit Committee, the Funds' or the Trusts or any Service Affiliate seeks to engage the Auditor to perform a service that was not approved, the Auditor, upon learning of such proposed engagement, should submit the proposed engagement to the Trusts' [Treasurer or the Adviser] and if the service fits within the independence guidelines, the [Treasurer or the Adviser] will arrange for a discussion of the service to be included on the agenda for the next regularly scheduled Audit Committee meeting so that specific approval can be obtained. If the timing of the project is critical and the project needs to commence before the regularly scheduled meeting, the specific pre-approval by the Chairperson of the Audit Committee must be obtained before any services are provided. The [Treasurer or the Adviser] will arrange this. The Auditor must not commence any such project until specific approval has been given. VIII. Recordkeeping The Trusts shall maintain a written record of all decisions made by the Audit Committee or by the Chairperson of the Audit Committee pursuant to these procedures, together with appropriate supporting material. In connection with the ratification of any inadvertent non-audit services, a record shall be made indicating that each of the conditions for this exception to the pre-approval requirement has been satisfied. 4 IX. Amendment The Audit Committee may review and amend these policies and procedures from time to time as it deems appropriate. Exhibit I STI CLASSIC FUNDS/STI CLASSIC VARIABLE TRUST Service Affiliates Subject to Pre-Approval of Non-Audit Services o Trusco Capital Management, Inc. o SunTrust Banks, Inc. o SunTrust Securities Inc. o SunTrust Robinson Humphrey o [any other affiliates that provide services to the Trusts] -------------------------------------------------------------------------------- 4 See footnote 1 herein. Exhibit II STI CLASSIC FUNDS/STI CLASSIC VARIABLE TRUST Prohibited Non-Audit Services o Bookkeeping or other services related to the accounting records or financial statements of the audit client o Financial information systems design and implementation o Appraisal or valuation services, fairness opinions or contribution-in-kind reports o Actuarial services o Internal audit outsourcing services o Management functions o Human resources o Broker-dealer, investment adviser or investment banking services o Legal services o Expert services unrelated to the audit (e)(2) Percentage of fees billed applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows: --------------------------------------------------------------- 2004 2003 --------------------------------------------------------------- Audit-Related Fees 0 % 0 % --------------------------------------------------------------- Tax Fees 0 % 0 % --------------------------------------------------------------- All Other Fees 0 % 0 % --------------------------------------------------------------- (f) Not applicable. (g) The aggregate non-audit fees and services billed by PWC for the last two fiscal years were $1,855,277 and $1,498,453 for 2004 and 2003, respectively. (h) The audit committee of the registrant's Board of Trustees reviewed and considered whether the provision of non-audit services that were rendered to the registrant's investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant, that were not pre-approved pursuant to paragraph (c)(7) (ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PURCHASERS OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 10. CONTROLS AND PROCEDURES. (a) The certifying officers, whose certifications are included herewith, have evaluated the registrant's disclosure controls and procedures within 90 days of the filing date of this report. In their opinion, based on their evaluation, the registrant's disclosure controls and procedures are adequately designed, and are operating effectively to ensure, that information required to be disclosed by the registrant in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that have materially affected, or are reasonably likely to materially affect, the registrants internal control over financial reporting. ITEMS 11. EXHIBITS. (a)(1) Code of Ethics attached hereto. (a)(2) A separate certification for the principal executive officer and the principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed herewith. (b) Officer certifications as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing as an exhibit. -------------------------------------------------------------------------------- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) STI Classic Funds By (Signature and Title)* /s/ James F. Volk ------------------------------------- James F. Volk, President Date 07/26/04 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ James F. Volk ------------------------------------- James F. Volk, President Date 07/26/04 By (Signature and Title)* /s/ Jennifer E. Spratley ------------------------------------- Jennifer E. Spratley, Treasurer & CFO Date 07/26/04 * Print the name and title of each signing officer under his or her signature.